Nepal Airlines (RA, Kathmandu) is struggling to repay a loan it took to finance the acquisition of two A330-200s and will request the government's assistance, The Himalayan Times has reported.
The carrier took out a NPR24 billion rupee (USD215 million) loan from the Employees Provident Fund (EPF) and Citizen Investment Trust (CIT) to finance the acquisition of the widebody Airbus aircraft. The loan is repayable in 60 instalments of around NPR804 million rupees (USD7.2 million) each.
According to the reports, the carrier has repaid the first instalment but only around NPR100 million rupees (USD900,000) of the second one which is now overdue. It also lacks the cash to meet its further obligations.
"As we can't pay back the loan on our own, we’ve sought financial support from Ministry of Culture, Tourism, and Civil Aviation. A high-level discussion is underway regarding the matter," an airline representative said.
Meanwhile, The Kathmandu Post has reported that Nepal Airlines plans to resume Y12 operations by the end of July 2019.
The carrier previously suspended the operations of the four Chinese-made regional turboprops after the only instructor tendered his resignation in early April 2019 and left for the United States. As such, the airline was left with only two Y12-rated pilots who were, however, unable to renew their type rating in the absence of an instructor.
"[Instructor] Sherpa is back in Nepal and we have retained him. He has started flying one of the four Y12E planes since this week. We expect that all four Y12E planes will be able to fly only after one and a half months," deputy spokesperson Navaraj Koirala said.
The Nepali Office of Auditor General recently revealed in its audit that Nepal Airlines lost NPR289.7 million rupees (USD2.6 million) on the operation of the four Y12Es in the last fiscal year.
