Nepal Airlines is seeking government funding to finance a new fleet of aircraft for its domestic operations. The airline currently has a fleet of nine short-haul aircraft, however many of these planes have been beset with problems. As international travel remains suspended, the airline is hoping to use this time to promote domestic routes instead.
A much-needed upgrade
Nepal Airlines is looking to purchase five new aircraft for domestic flights and is requesting $33m from the government. The proposal is similar to one submitted in 2018, which saw the airline hoping to purchase five DHC-6s. This time, the airline is assembling a team to assess which aircraft will be best suited to Nepal’s difficult terrain. Flights are a vital link for many mountain communities in the country.
Currently, Nepal Airlines operates a unique fleet of nine domestic aircraft, consisting of three de-Havilland Canda DHC-6-300s, two Xian MA-60s, and four Harbin Y12s. If the last two aircraft don’t sound familiar, that’s not a surprise. Xian and Harbin are Chinese aircraft manufacturers, both subsidiaries of the state-owned Aviation Industry Corporation of China.
Difficult times for the airline
The coronavirus has forced all airlines into survival mode, and Nepal Airlines is no exception. The airline expects to lose $412mn by the end of the financial year, mainly due to the pandemic. However, Nepal Airlines has struggled with heavy losses in the last few years and has been on the verge of bankruptcy too. The latest crisis could be the end of the airline without a government bailout.
Currently, the airline is struggling to pay the interest on the loan it took out to purchase its two A330-200s for $209.6mn. The airline has requested government aid to pay for six months worth of interest payments on the loan. If the airline fails to repay its loan, it could see its planes grounded.
While plans for a new domestic fleet do make sense, it seems that Nepal Airlines has a more existential crisis on its hands. Without a bailout from the government, the airline could collapse considering its precarious finances at this time. If the airline does survive, a new fleet could allow the airline to be more competitive in the domestic market. Considering most of the airline’s current fleet is either grounded (the MA-60 and Y12) or over 30 years old (DHC-6-300), a refresh is quite in order.
What do you think about Nepal Airline’s plans for a new domestic fleet? Will the airline survive? Let us know in the comments below.