The MA60 aircraft gifted by China to Nepal Airlines Corporation (NAC) has become a “burden” for the national flag carrier due to performance and financial issues, Tourism Minister Kripasur Sherpa told the parliamentary Development Committee on Tuesday.
The Chinese-made Modern Ark (MA60) plane has been plagued by problems since its arrival. “The aircraft’s spare parts and insurance premium, among other costs, have been creating an excessive financial burden for NAC,” he told the lawmakers. “NAC has been paying Rs246,000 daily as insurance premium.”
The northern neighbor had provided a 56-seater MA60 and 19-seater Y12e as gifts to the Nepal government. Meanwhile, the government has another MA60 and three Y12e on order.
However, Tourism Ministry officials said they wouldn’t be taking delivery of the aircraft under the existing conditions. The government has also formed several committees to sort out the issues.
Recently, a six-member committee has been formed under the chairmanship of Suresh Acharya, joint secretary of the Tourism Ministry, to recommend appropriate measures and sort out the problems NAC has been having with the aircraft.
The panel has been entrusted to present recommendations to the government on what to do with the existing aircraft and whether to take delivery of those on order.
On January 26, NAC had written to the Tourism Ministry that the Chinese-gifted aircraft had become financially unviable to fly due to its poor performance, high cost of spare parts, expensive charges levied on training the crew and untimely delivery of spare parts, among others.
The carrier had decided to return the aircraft if the manufacturer did not address the problems. It said if the existing problems remained unsolved, it would be forced to review its decision to acquire four other aircraft which are scheduled to be delivered in the near future.
NAC has been paying 4.4 percent of the price of the aircraft which comes to $15 million in insurance premiums annually.
The airline had told the ministry that the issue should be settled by mid-April as the aircraft had been insured only until that time.
However, NAC decided to renew the insurance coverage for the MA60 for three months till mid-July after the Tourism Ministry pledged to resolve the problems.
The MA60 arrived in Kathmandu on April 27, 2014, but was immediately forced to take an extended rest at Tribhuvan International Airport (TIA). The aircraft was eventually put into commercial service in July 2014.
Since then, the plane has been grounded at different times. The MA60 is not capable of flying at full capacity, something that was not revealed when the aircraft deal was made.
The 56-seater aircraft can carry 54 passengers when taking off from Kathmandu ’s TIA, but during the return flight from smaller airports like Bhadrapur, it can carry only 34 passengers. The load restriction problem is seen mostly during the summer due to the higher temperature and runway length.
Another China-gifted aircraft, the Y12e, also has a load restriction problem. NAC has to fly it with three seats empty.
The Y-12e, delivered in November last year, was found to be unsuitable for mountain regions. The aircraft’s specifications do not allow it to land in remote destinations as it can only fly to airports with a maximum grade of 2 percent or about 1.2 degrees of slope.
In November 2012, NAC had signed a commercial agreement with AVIC, a Chinese government undertaking, to procure six aircraft.
As part of the accord, China has provided the MA60 and the Y12e worth Rs2.94 billion as gifts and a soft loan of Rs3.72 billion to buy one MA60 and three Y12e planes.