NAC unable to pay loan it owes while procuring planes from China

6 Chinese planes grounded for good

Khabarhub

July 22, 2020

2 MIN READ

NAC unable to pay loan it owes while procuring planes from China

NAC Building, Kathmandu (File Photo)

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KATHMANDU: The coronavirus pandemic has aggravated Nepal Airlines Corporation’s (NAC) financial health going through hard times due to debts and liabilities.

Citing the financial crisis, it is going through, the Wednesday’s meeting of NAC’s Board of Director refused to renew 145 contract staffers whose contract had expired on July 15.

Issuing a press release on Wednesday, NAC’s spokesperson Archana Khadka informed that owing to the financial liabilities it owes and the disturbance in its flight schedule, NAC has decided not to renew its staff whose contract period has expired on July 15.

There are 450 staffers working in contract in the Corporation.

She added that NAC would call back the recently sacked staff on priority basis once the domestic and international flights are restored to normalcy.

Financial constraints

As hinted in the press release, NAC is hard-hit by the coronavirus pandemic. But the bitter truth is that the Corporation was already in difficulties due to the loan and liabilities especially from the aircraft like the ones procured from China.

NAC has not paid the principal and interest of the loans it took for procurement of some planes.

NAC has not been able to pay the loan it owes for the debt it took for the procurement of planes from China.

Interestingly, the June 30 meeting of NAC board has decided to stop using Chinese aircrafts owing to various problems including the ones related with safety and security. With this decision 6 Chinese planes are to be stalled for good.

NAC has to pay the Rs 345.56 million  and Rs 665.59 million as the interest and principal amount related to the procurement of the Wide body and Narrow body aircraft respectively. NAC has not paid the installment since January.

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