Nepal Airlines Criticised Over Delayed Aircraft Loan Repayments
Nepal’s Auditor General has again criticised Nepal Airlines for failing to meet loan repayment obligations tied to aircraft purchases. In its annual report released on May 14, 2025, the Auditor General’s Office highlighted ongoing repayment issues with loans from the Employees Provident Fund (EPF) and the Citizen Investment Trust (CIT), both state-owned pension funds.
Nepal Airlines owes NPR28.57 billion (USD209 million) to EPF from a 2017 loan used to purchase two Airbus A330-200s. It also owes NPR19.39 billion (USD141.5 million) to CIT from a 2015 loan for two Airbus A320-200s. The original loans totaled NPR11.99 billion (USD87.5 million) and NPR9.98 billion (USD73 million), respectively. Due to irregular payments, the loan principals and accrued interest have increased significantly.
The report criticised both Nepal Airlines for failing to make regular repayments and the lenders for not enforcing payment schedules. Nepal Airlines had previously requested interest, penalties, and damages to be waived due to the COVID-19 pandemic and also sought to restructure its repayment terms, but the request was denied.
In April, Nepal Airlines issued a press release stating it paid NPR539.55 million (USD3.95 million) for its A320 obligations and NPR281 million (USD2 million) toward the A330 loan. The airline claims to have repaid NPR7.39 billion (USD54 million) in total.
Separately, the airline resumed domestic operations with its two DHC-6-300s. Aircraft 9N-ABU returned to service last month, while 9N-ABT resumed flights earlier this week after nearly a year grounded.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com