September 19: The five-member task force formed to identify the issues plaguing the Nepal Airlines Corporation (NAC) has submitted its report to the Minister of Culture, Tourism and Civil Aviation Yogesh Kumar Bhattarai. The task force, in its 54-page report, has furnished recommendations to convert the State-Owned Corporation into public limited arguing that it was the only way to salvage the debt-ridden NAC. It was shared in a press conference organized by the Ministry of Culture, Tourism and Civil Aviation (MoCTCA) here yesterday.
The task force coordinated by Sushil Ghimire has offered a 13-point recommendation to be considered immediately and some long-term action-plan to execute to give the NAC a new lease of life. The report prepared after studying NAC’s financial situation and identifying its managerial, legal, organizational issues among others has found out that the financial management system in the NAC was frail.
Pressing for the need to consider changing the financial structure/system prevailing the NAC and restructuring its management, the report has assessed that NAC had taken a loan at a disproportionately high rate while procuring wide-body aircraft. An inadequate number of aircraft and hefty amount spent for the repair the NAC’s old aircraft have been one of the major economic snags plaguing the NAC. There are currently nine aircraft for domestic flights and two narrow-body airplanes and two wide-bodies for international flights.
The NAC has incurred loss worth Rs 910 million from its six aircraft in the last fiscal year, especially the Y-12 and MA-60 aircrafts that are flying in the domestic route, the report stated. The task force has suggested replacing these two aircraft. Furthermore, in view of the Visit Nepal 2020, the NAC has been asked to procure two new narrow-body A-320 aircraft to fly them in the frequently flown routes. Receiving the report, Minister Bhattarai pledged to look into the report and implement the suggestions with proper action-plans.
“The task force has submitted its report working hard on the studies of the NAC. We will study the report and make public the action-plans.” Moreover, discussions will be held within the Ministry to convert the NAC into public limited at policy level to reform state-owned air transport service provider. As for forging strategic partnership for NAC to strategically improve its financial situation, an intense discussion will be held before moving forward in this direction at policy-level, according to the Minister.
Task-force coordinator Ghimire shared that the report has underscored expansion of resource marker and destinations to revitalize the economic aspect of the NAC. The government has invested over Rs 31 billion in the NAC while its cumulative loss stands at over Rs 5 billion. It has around Rs 40 billion of loan while procuring wide-body aircraft and narrow-body aircraft. NAC has assets amounting to Rs 3.6 billion but assets worth Rs 1.8 billion has been rendered useless. The task force also comprised chartered accountant Subodh Kumar Karna, management expert Dim Prasad Poudel, Captain Shudhir Shumsher Rai and Joint-Secretary at MoCTCA, Buddhisagar Lamichhane.
