Nepal Airlines (RA, Kathmandu) is in talks with Lufthansa Consulting and German Aviation Capital (GAC) to draft a restructuring programme for the ailing Nepali national carrier. The negotiations involve their proposed consultancy and management services.

The Ekantipur newspaper says Lufthansa Consulting's proposal is broken down into three phases which collectively last around four years.

Phase One entails a gap analysis to identify the airline’s shortcomings while Phase Two, would see the German firm taking over the airline's management appointing its own chief executive officer, chief financial officer, and chief marketing officer. This aspect of the plan will last twelve months and may be terminated if Nepal Airlines believes it is capable of handling things on its own. However, the contract can be extended for two years. Here, Lufthansa Consulting will take 2% of Nepal Airlines' annual revenue as compensation. Phase Three entails the handing back of the airline's management to the airline's backer, the Nepal government.

In its presentation, GAC proposed that should Nepal Airlines sign with Lufthansa Consulting, it would help the airline lease four narrowbody jets within 35 days.

Each proposal will be put to cabinet for consideration once government is satisfied with the terms and conditions.

Last year, government said the restructuring of the carrier would be a precursor to it being either privatized or twinned with an international strategic partner.

Nepal Airlines, which has incurred annual losses last amounting to NPR170million (USD1.71million), has also suffered from poor public-image given incidents of corruption and its high frequency of cancellations and delays.