From July 16th onwards, Nepal Airlines will no longer operate all of its Chinese aircraft. This includes two Xian MA60s and four Harbin Y12s. The planes in question have not proven to be beneficial and are viewed as a liability.
The Nepali airline claims it cannot afford to fly the aircraft, and thus these planes will be grounded for the foreseeable future. According to The Kathmandu Post, the order was given by the Nepal Airlines Corporation, in hopes of cutting losses for the flag carrier. Beyond that, the Y12e aircraft has long been questioned for its functionality and performance.
Nepal's national carrier – The Nepal Airlines is grounding its Chinese aircraft. A report claims that the planes had become a big liability for the airline.
— Vicky 💛🌻 (@VickyAgarwalaVA) July 15, 2020
Nepal Airlines added the six aircraft to its fleet in 2014, which has come to be known as the airline’s first acquisition in 28 years.
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Nepal’s deal with China
In a government-to-government deal, it appears Nepal was forced to acquire the aircraft. The sale began in November 2011, when technical teams from both Bangladesh and Nepal visited China to inspect the MA60s and Y12s.
The Kathmandu Post reported that the “Chinese government said Nepal would have to buy a number of aircraft if it wanted some for free.”
As such, while the team from Bangladesh deemed the aircraft “not suitable,” Nepal went ahead to procure the six aircraft in an agreement with the Aviation Industry Corporation of China (AVIC). The deal took place in 2012. As a result, China gifted one MA60 and one Y12 to Nepal Airlines two years later.
However, according to Achyut Pahari, a Nepal Airlines board member, this was the carrier’s worst decision. As reported by The Post, Pahari said,
“It was prompted by greed for commissions. They [The technical team] submitted a fabricated report. The Y12e was compared with the Twin Otter, and the MA60 was compared with the ATR-72. Nepal Airlines is paying the price now. Flying these planes means throwing good money after bad.”
The MA60 and Y12e
The Xian MA60 is a twin-engine built turboprop and holds up to 60 passengers. It is explicitly designed for short-haul and domestic routes. The Harbin Y12e, also a twin-engine turboprop, is a high-wing plane that seats 17.
Earlier this year, there was an incident that took place with one of Nepal Airlines’ Y12e aircraft. The episode also prompted the grounding of all of the Chinese aircraft.
On March 28th, the Y12e aircraft landed 60 meters short of the Nepalgunj Airport’s runway. It then swerved and stopped right before entering grassland, says the Economic Times. The aircraft has thus been considered “unsuitable for Nepal terrain.”
The first MA60 arrived in Nepal in April 2014, and four Y12 aircraft were added to the fleet in November that year. At that time, Nepal Airlines had no trained pilots to fly the planes. Currently, there are still no suitable pilots.
In fact, one of the two MA60s has been grounded for three years.
Sanjiv Gautam, former director-general of the Civil Aviation Authority (CAA) of Nepal, believes that the flag carrier could have prepared better. The airline should have ensured it had suitable pilots before purchasing the planes, he said in The Kathmandu Post.
The fate of these aircraft
Since the planes acquired by Nepal Airlines was bought on loan, the carrier has been struggling with making payments, especially since it has not been making full use of the aircraft. Additionally, the COVID-19 pandemic has affected the airline’s financial standing.
The Kathmandu Post reports that the Nepali government has to pay “an annual interest rate of 1.5% and a service charge and management expenses amounting to 0.4% of the overall loan amount taken by the Ministry of Finance as per the deal.”
Then, the ministry charges the Nepali carrier 8% annual interest on the amount of the disbursed loan.
Tri Ratna Manandhar, also of Nepal’s CAA, says that auctioning the planes off could benefit the airline.
“It seems it cannot fly them well. So, it’s wise to auction them because they will keep on increasing its losses,” he said in The Kathmandu Post.
However, it might not be that simple as the airline struggled to sell off one of its Boeing 757s in 2019. Whatever it is, the airline should not linger, and make a decision quickly. Either it sells off the planes, or uses them fully by obtaining the right pilots and conducting flight tests.
Do you think Nepal Airlines made the right choice to ground these aircraft? Have you flown in an MA60 or Y12e before? Let us know in the comments.