Nepal Airlines to sell five Chinese-made turboprops - South Asia Time

Nepal Airlines to sell five Chinese-made turboprops

 October 10, 2022  

BY RILEY PICKETT — Nepal Airlines will sell five Chinese-made turboprops for a loss. The aircraft in question are unfit to fly and have been grounded for years. The airline previously tried to lease them out but has had no takers. They have been a financial burden on the airline, which is already grappling with enormous debt. The airline accepts that demand for these aircraft is low and will have to sell them for far less than it paid ten years ago.

Financial burden
The Nepalese Finance Ministry owns the five aircraft. They were initially procured for the airline to be used on underserved mountain routes. The planes listed for sale include two MA60 aircraft and three Y12e aircraft. The aircraft were not in service for long before they were grounded. The airplanes have had an unusually high number of maintenance issues for their age, and spare parts are hard to come by for this aircraft. On top of maintenance dilemmas, the airline has struggled to find enough qualified pilots to fly the planes and even fewer flight instructors that can teach other pilots to fly the aircraft.

In July 2020, the airline’s management announced that it would ground all Chinese-made airplanes. In December 2020, the airline petitioned the Nepalese Civil Aviation Ministry in hopes that they would receive permission to part with the aircraft. After being grounded for two years, the airline finally received the authorization.

Farewell attempts

For these reasons, the Financial Ministry approved Nepal Airlines’ request to lease the aircraft to another air carrier. The airplanes were put up for lease on September 14th. The only parties eligible to bid for a lease must have a valid air operator’s certificate and at least one aircraft in their fleet. If another air carrier were to lease the planes, it would be a dry lease, meaning that the lessor would be responsible for supplying the flight and cabin crew.

The bidding period was scheduled to close on October 31st. However, no party has seriously considered leasing the aircraft leading the airline to put them up for sale this week. Before the aircraft became available for lease, the Financial Ministry told the airline to sell the aircraft for a loss if a lessor should not arise, as they have been burning a hole in its wallet for years. Both parties recognize that the longer these planes remain unairworthy, the less they will be worth. A former board member of Nepal Airlines, Ashok Pokhrel, stated,

“No doubt, the planes can fly. It was a management problem that the shiny new planes never flew for the purpose they were brought,

“Now, years after they were acquired, it is wise to sell them rather than keep them in storage,

“If the planes begin to rust, they will become scrap.”

Several of the aircraft have already begun showing signs of corrosion. The next owner will likely use the planes for parts instead of going through the trouble of making them airworthy again. The airline’s experience with these planes has shown that aftermarket support is limited, leading many operators to opt to acquire aircraft produced by well-established western manufacturers. ( From : Simpleflying)