Nepal Airlines Corporation (NAC) today told the Parliamentary Finance Committee that it could incur a loss of Rs1.5 billion in the current fiscal year, ending next week.
The national flag carrier’s losses on domestic operations amount to Rs 500 million, and losses on the international sector totals Rs 3.99 billion, informed NAC executive chairman Madan Kharel. “These losses overshadowed the net profit of Rs 3 billion the airline made from its ground handling operations at Tribhuvan International Airport (TIA),” he said, adding that the corporation had posted a profit of Rs 200 million in the last fiscal year.
Kharel attributed the losses to higher fuel prices and competition from budget airlines, which prompted low fares of the. “The corporation failed to pay another quarterly installment due in July due to a 'temporary liquidity crisis',” Kharel said, adding that it is the third time that NAC has defaulted on repayments to Citizen Investment Trust (CIT) and Employees Provident Fund (EPF), and its debts have piled up to Rs 1.13 billion. The national flag carrier has not paid two quarterly installments amounting to Rs 1.18 billion to the EPF and one quarterly installment of Rs730 million to the CIT.
The corporation has borrowed Rs 36 billion to the CIT and EPF, and it has to pay annual interest of Rs 3.66 billion to them but the state-owned airlines, which has been struggling to manage its cash flow since it inducted two brand new Airbus A330 jets into its fleet last year, has also failed to utilised the aircraft due to lack of proper plan, and routes. According to Kharel, operating the Airbus A330 jet is three times costlier than the Airbus A320. The corporation has two A320s.
Former Prime Minister Dr Baburam Bhattarai, on the occasion, said that the corporation is ill, and it needs a proper cure for the disease. He also suggested to privatise the company to turn it into a successful company.
Likewise, lawmaker Ghanshyam Bhusal said that Nepal Airlines is keeping its head above water with its income from ground handling.
Though, the tourism secretary Mohan Krishna Sapkota, on the occasion, said that the corporation needs restructuring.
The NAC has started knocking on the government's door asking for a bailout since 2017. In 2017, it asked for Rs 20 billion to raise its paid-up capital to support its financial restructuring plan.
The national flag carrier’s losses on domestic operations amount to Rs 500 million, and losses on the international sector totals Rs 3.99 billion, informed NAC executive chairman Madan Kharel. “These losses overshadowed the net profit of Rs 3 billion the airline made from its ground handling operations at Tribhuvan International Airport (TIA),” he said, adding that the corporation had posted a profit of Rs 200 million in the last fiscal year.
Kharel attributed the losses to higher fuel prices and competition from budget airlines, which prompted low fares of the. “The corporation failed to pay another quarterly installment due in July due to a 'temporary liquidity crisis',” Kharel said, adding that it is the third time that NAC has defaulted on repayments to Citizen Investment Trust (CIT) and Employees Provident Fund (EPF), and its debts have piled up to Rs 1.13 billion. The national flag carrier has not paid two quarterly installments amounting to Rs 1.18 billion to the EPF and one quarterly installment of Rs730 million to the CIT.
The corporation has borrowed Rs 36 billion to the CIT and EPF, and it has to pay annual interest of Rs 3.66 billion to them but the state-owned airlines, which has been struggling to manage its cash flow since it inducted two brand new Airbus A330 jets into its fleet last year, has also failed to utilised the aircraft due to lack of proper plan, and routes. According to Kharel, operating the Airbus A330 jet is three times costlier than the Airbus A320. The corporation has two A320s.
Former Prime Minister Dr Baburam Bhattarai, on the occasion, said that the corporation is ill, and it needs a proper cure for the disease. He also suggested to privatise the company to turn it into a successful company.
Likewise, lawmaker Ghanshyam Bhusal said that Nepal Airlines is keeping its head above water with its income from ground handling.
Though, the tourism secretary Mohan Krishna Sapkota, on the occasion, said that the corporation needs restructuring.
The NAC has started knocking on the government's door asking for a bailout since 2017. In 2017, it asked for Rs 20 billion to raise its paid-up capital to support its financial restructuring plan.
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