China Refuses Nepal Airlines’ Request to Return Chinese Aircraft

The Aviation Industry Corporation of China (AVIC) has declined Nepal Airlines’ request to take back five grounded Chinese-made aircraft. The request was made during a December 2024 meeting, but AVIC advised the airline to seek alternative solutions instead of returning the planes.

Nepal Airlines originally acquired four Y12E turboprops and two MA-60 aircraft through a Chinese government-backed deal in the last decade. Two aircraft were gifted, while the remaining four were purchased via soft loans. However, by 2020, Nepal Airlines deemed the aircraft unsuitable for its operations and grounded them. One Y12E was later written off following a runway incident, leaving five aircraft parked at Kathmandu, costing the airline approximately NPR200 million (USD1.47 million) annually in insurance and parking fees.

During the 2024 meeting, Nepal Airlines’ chairman, Ubaraj Adhikari, urged AVIC to reclaim the aircraft as a goodwill gesture. AVIC refused but offered to assist in selling or disposing of the planes, provided Nepal Airlines clears its outstanding payments for technical support and spare parts. The airline reportedly agreed to settle these debts.

Previous attempts to sell or lease the aircraft in 2022 and 2023 failed to attract buyers. AVIC suggested launching a new sales campaign targeting buyers outside China or transferring the aircraft to domestic agencies such as the Nepal Army Air Wing or Civil Aviation Authority of Nepal.

Meanwhile, Nepal Airlines has sought guidance from Nepal’s Ministry of Finance on the next steps and may approach the Chinese government again for resolution.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com