NAC assets worth Rs 54.17 billion, debt Rs 45 billion
KATHMANDU, AUGUST 25
The recently conducted due diligence audit (DDA) of the national flag carrier has revealed that Nepal Airlines Corporation has total assets worth Rs 54.17 billion, while it still has debt of Rs 45.94 billion.
This was the first ever DDA of the corporation conducted by the Ministry of Culture, Tourism and Civil Aviation.
Tourism Minister Yogesh Bhattarai revealed the aforementioned data during a virtual press meet conducted today to publish the annual progress report of MoCTCA for fiscal year 2019-20.
Of the total debt, around Rs 40 billion is the money borrowed by NAC for the purchase of the two wide-body aircraft and two narrow-body aircraft. Meanwhile, the remaining debt includes overdraft loan and money acquired for the Chinese aircraft, among other miscellaneous loans, said Sushil Ghimire, executive chairperson of NAC.
According to him, NAC has been paying the loan instalments of the wide-body and narrow-body aircraft.
“So far, we have paid the instalments of all the four aircraft till December 2019. After that we were not able to pay the instalments as the COV- ID-19 pandemic hit the nation and the industry,” he said, adding, “The remaining instalments have been added to our total loan.” Ghimire said that to cope with the impact of the virus, NAC had adopted a few cost-cutting measures and was planning a new business strategy at the same time.
Meanwhile, even though the pandemic has affected NAC, Ghimire said the airline was not facing a loss during the lockdown as it had been busy conducting chartered flights.
“Our first priority is social responsibility when we organise chartered flights. Hence, we are neither incurring any loss nor making any profit with the chartered flights,” he revealed.
“In fact, the government has not prioritised NAC as a state-owned company.”
As the government has also allowed private airline companies to operate chartered flights, Ghimire said the national flag carrier had to compete with them by maintaining its social responsibility which is a bit difficult for the corporation.
“Despite having the capacity, we are not operating flights in a full-fledged manner,” he said. “Other airlines will not fly if there is no profit, but we have to fly for social responsibility as directed by the government.”
The national flag carrier has adopted a few cost-cutting measures to reduce its expenses to cope with the adverse situation created by the COV- ID-19 pandemic. Apparently, NAC has laid off 145 contract-based workers. Ghimire said most such workers were political appointees. “Along with them, other workers on contract were also laid off.
However, looking at the situation their contracts could be renewed in the future,” he said.
NAC has also sent back nine of the 15 foreign pilots whose contracts had terminated.
“Soon after upgrading our own pilots, we will be sending back the remaining foreign pilots as well,” he said, adding, “Another major cost-cutting is miscellaneous expenses worth Rs 1.2 to Rs 1.3 million annually.
This budget has been removed starting this fiscal.”
NAC is also planning not to appoint any new employee through the Public Service Commission examination at the moment.
NAC is also preparing to bring new aircraft for domestic flights, as all the Chinese aircraft have been grounded.
A version of this article appears in e-paper on August 26, 2020, of The Himalayan Times.