Nepal Airlines mulls options to get rid of Chinese aircraft

Nepal Airlines (RA, Kathmandu) has proposed to the Ministry of Tourism four options to offload six unwanted Chinese-made turboprops even as selling the aircraft may prove difficult, The Kathmandu Post has reported. The Nepali flag carrier resolved to retire four Y12Es and two MA-60s earlier this year, after years of operations marred by technical difficulties, a lack of spare parts and trained pilots, and economic losses. The airline suggested that the aircraft could be bought back by their manufacturers, Harbin Aircraft Manufacturing Corporation and Xian Aircraft Company (both subsidiaries of state-owned AVIC holding), for their current market price. Other options would be to either lease the aircraft to other Nepali carriers or to seek Chinese or international buyers or lessors interested in taking them over. Finally, Nepal Airlines also suggested simply auctioning the aircraft off. However, the process is likely to be procedurally complicated, notwithstanding minimal market demand for the types. All six aircraft are formally owned by the Nepalese Ministry of Tourism and dry-leased to the airline. One Y12E and one MA-60, worth a combined NPR2.94 billion Nepalese rupees (USD25 million) in 2014, were gifted to Nepal by China. This makes selling them back to China unfeasible. The other four units were bought by Nepal for a total of NPR3.72 billion (USD31.5 million), using a soft loan from the EXIM Bank of China. Nepal Airlines has reportedly selected two ATR72s and three DHC-6s as replacements for the ill-suited Chinese turboprops, although no firm decisions regarding new orders or leases have been announced yet. Meanwhile, the Nepalese government is taking steps to revive its domestic aviation sector, heavily reliant on international tourism. As borders gradually reopen, albeit under tough restrictions, Minister for Culture, Tourism and Civil Aviation Yogesh Kumar Bhattarai has pledged to develop Simikot airport into a tourist hub comparable to Lukla. The latter serves as the gateway to the mountains in south-eastern Nepal, while the former, once expanded, would attract more tourists to the north-west of the country.