Nepal Airlines Announces Auction for MA-60s and Y12s Amidst Attempts to Offload Chinese Aircraft

Nepal Airlines, the flag carrier of Nepal based in Kathmandu, has issued a new tender notice for the auction of two MA-60s and three Y12s on December 21, 2023. This latest effort to sell the Chinese-manufactured aircraft represents another attempt by the airline to offload these models, which have been deemed redundant.

The five aircraft are being sold on an “as-is-where-is” basis. Previously, Nepal Airlines has made several attempts to either lease or sell these aircraft. A notable instance earlier this year involved the Chinese Embassy in Kathmandu, which reportedly pressured the airline to either halt the sale or maintain the price, to avoid sending a negative message about the aircraft’s value. In October, Aviation Asset Management Inc., based in the USA, recommended selling the aircraft for their scrap value.

The Nepalese government had acquired these planes for Nepal Airlines in the early 2010s. However, by 2020, the carrier had retired the aircraft, citing their unreliability, high operational costs, and unsuitability for Nepal’s flying conditions. The maintenance and storage of these aircraft have reportedly cost Nepal Airlines around NPR 2 billion rupees (approximately USD 15 million).

The specific aircraft up for auction are two MA60s, and three Y12s. Each of these aircraft comes with detailed usage and cycle completion history. All five aircraft are being sold with their engines, but the tender documentation does not explicitly state their airworthiness. The aircraft have set floor prices, and on-site inspections can be arranged.

The tender process outlined in the documentation includes the issuance of a Letter of Intent (LOI) to the selected bidder, which must be accepted within 15 days. The successful bidder then has 60 days to sign a contract with the airline, with the full payment due within 30 days of contract signing. Additionally, the buyer is required to remove the aircraft from Kathmandu’s Tribhuvan International Airport within 180 days.

Interested parties can access the complete tender documentation at Nepal Airlines’ corporate office. Bids, which must include a bank guarantee worth 10% of the bid amount, close on February 4, 2024, at 1300L (0715Z). Unsuccessful bidders will have their bank guarantees returned. This auction represents a significant step for Nepal Airlines in its ongoing efforts to streamline its fleet and reduce operational losses.