Aug 062012

The government of Nepal had provided approval to Nepal Airlines Corporation (NAC) to procure two narrow-body aircraft to expand the international fleet. This will be the first time in 25 years that the national flag carrier will be buying aircraft if the plan succeeds.

The Ministry of Culture, Tourism and Civil Aviation (MoCTCA) who had submitted the proposal to buy two jets finally approved by the Cabinet on Wednesday. The Officials of Ministry said that they had many options that included to proceed to old procurement process or to start a fresh.

The old process includes continuing the Airbus A320-200 (narrow body) deal with Airbus that was revived on Dec 29, 2011 after the French Embassy in Nepal wrote to the Tourism and Foreign ministries that Airbus was ready to provide the aircraft under the same financial conditions agreed three years ago.

The NAC board had already decided to purchase two aircraft from Airbus i.e. Airbus A320-200 (narrow body) and Airbus A330-200 (wide body) to expand international fleet on Oct. 26, 2009. However, with controversy surrounding the purchase process, Public Accounts Committee had directed the government to cancel the deal on Dec 28, 2009. Subsequently, on May 25, 2010, the Ministry of Finance directed the MoCTCA to scrap the purchase process. The plan was again revived in December last year.

NAC’s plan to expand its fleet seems to have been jinxed for the last two decades. The carrier currently possesses two ageing Boeing 757s, the first of the two arrived in 1987. The Boeing 757 is a mid-sized, narrow-body twin-engine jet airliner built by Boeing Commercial Airplanes from 1981 to 2004. Production of the 757 ended in 2004 due to a lack of orders.

NAC officials said that it was a positive decision of the government to give the okay to procure aircraft as the Boeing 757 was being phased out in a number of countries while some countries used this aircraft as a cargo carrier.

NAC has not been able to induct new aircraft into its fleet for the last two decades as every procurement effort has got mired in controversy. NAC is now down to five planes from 19 more than two decades ago. MoCTCA officials said that operating 757s had become economically unviable due to their high maintenance costs compared to the revenue they generate.

According to NAC, it has to conduct major C-checks and overhauling of its two Boeings in August and September, which will cost an estimated US$ 12.2 million. In addition, the higher fuel consumption of its old jets is another worry for the state-owned airline.

The average fuel consumption of the Boeing 757 is 18 tonnes per flight on the Kathmandu-Dubai-Doha sector while with the same passenger capacity, the Boeing 737-700ER consumes only 11 tonnes. NAC officials said that they were hopeful this time to get new aircraft as all the preparations have been done by the ministry itself.