KATHMANDU, Oct 15: Minister for Culture, Tourism and Civil Aviation, Sudan Kiranti on Sunday said that up to 10 aircraft will be purchased for Nepal Airlines Corporation (NAC) in the current fiscal year.
While the NAC has been struggling to settle its previous dues, Minister Kiranti put forth the ambitious plan for the national flag carrier. The NAC owes more than Rs 45 billion to the Employees Provident Fund along with a number of banks and financial institutions. The corporation had taken loans to purchase two narrow body and two wide body aircraft to expand its business.
Minister Kiranti put forth the government's ambitious plan while receiving a memorandum submitted by the Nepal Students Union (NSU), the students' wing of the ruling party Nepali Congress, the Minister’s Quarters in Pulchowk. The NSU demanded the black market for the price of air tickets be controlled during the festival.
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Kiranti expressed the view at a time when passengers looking for air travel during Dashain and Tihar have suffered excessive hike in air ticket fares. He said due to the increase in the price of fuel, the fare has increased massively.
Minister Kiranti sought the need for government intervention to regulate Nepal’s aviation businesses. “While the government should give concessions on airfare to control the price hike, another option is to intervene in the market by adding more planes of NAC.”
"Fuel prices have increased significantly, resulting in a natural 35 percent increase in airfare. Additionally, a 13 percent Value Added Tax (VAT) has been imposed. To address this, we are actively working on acquiring nine to ten more aircraft this year. Without expanding the NAC’s fleet, it will be challenging to attract tourists or control airfare. The process of acquiring new aircraft will officially commence in the near future," he said.
Kiranti claimed that tourists will not come to Nepal unless there are an adequate number of flights by the national flag carrier. He claimed that the process of purchasing the aircraft will be formally started before Dashain.
An official of the NAC, however, expressed doubt over Minister Kiranti’s “exaggerated” claims. “The NAC went through financial problems mainly due to big corruption scams while procuring aircraft apart from poor management in the day-to-day operations,” said the source adding that the NAC is now in the process to procure three 19-seater aircraft.
