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Nepal Airlines' losses piling up as Airbus remains grounded

Nepal Airlines' losses piling up as A320 grounded

2018 02 01

2018 02 01

Post Report, Kathmandu

Jan 30, 2018-An Airbus A320 belonging to Nepal Airlines Corporation (NAC) has been stuck at New Delhi, India due to a damaged engine with few chances of its resuming operations any time soon.

NAC has been racking up losses for the past month as the jet with registration number 9N-AKW and named Sagarmatha has been sitting at Indira Gandhi International Airport since December 25

The national flag carrier has been losing income of nearly Rs100 million monthly. The figure has been computed on the basis of the estimated annual income of Rs1.2 billion for each of NAC’s aircraft.

Apart from lost revenue, landing and parking charges, cost of repairing the damaged engine and the rental for a replacement engine will push up NAC’s losses.

“Total losses are expected to be in the millions,” sources privy to the matter said. “A month has passed, but NAC is still not sure when the aircraft will get off the ground. It’s a sheer negligence of the management.”

NAC Managing Director Sugat Ratna Kansakar said they could not immediately determine the amount of losses. “Profit and loss are part of the operation. If the aircraft is grounded, it’s definitely a loss.”

Kansakar added that they had found a replacement engine for a temporary period. “We will be leasing the engine soon, it could cost $150,000 per month.”

Kansakar said that the engine needed to be brought to Delhi from London, and that it would take a few weeks for the Airbus to become flight ready.

However, NAC is not sure when the damaged engine will be repaired. “It may take at least three months,” said Kansakar. 

Meanwhile, the national flag carrier has been preparing to invite bids for a ‘power by the hour’ programme that will allow it to accurately forecast cost and free it from purchasing stocks of engines and accessories.

“The ‘power by the hour’ is a new concept. It’s like insurance that protects the lessee from unexpected costs of premature engine failure,” said Kansakar, adding that NAC would pay for the service on an installment basis.

The facility was introduced by engine makers Rolls-Royce. Other aircraft engine manufacturers such as General Electric and Pratt & Whitney offer similar programmes. The family of A320 engines is manufactured by International Aero Engines (IAE). NAC’s brand new jet had arrived at Tribhuvan International Airport in February 2015.

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