AVIATION

Nepal Airlines drowning in Financial Crisis; Inefficient Management and Negligence

Even though the regulation stated that NAC could rent engines for up to 90 days only, Executive Chairman Adhikari, along with the senior management of the corporation, rented engines from the same company for 20 months.

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Nepal Airlines Airbus A320 '9N-AKW' Sagarmatha - Aviation in Nepal (Internet Photo)

  • 1. On December 27, 2021, the 9N-AKW “Sagarmatha” aircraft encountered engine problems while parking in Qatar after disembarking.
  • 2. The aircraft remained grounded in Qatar until March 2022.
  • 3. On March 3, 2022, a deal was reached with MTU to rent engines, and the aircraft flew for 3 days in March.
  • 4. The engine rental with MTU costs $2,278 per hour daily and $239 per cycle.
  • 5. The engine that broke down in December 2021 was not repaired, and another engine of the same aircraft encountered problems on July 30, 2022, leading to the aircraft being grounded again.
  • 6. The aircraft grounded on July 30, 2022, flew from September 2023 after the repair of the engine that broke down in December 2021.
  • 7. The engine that broke down in July 2022 was repaired in August 2023.
  • 8. In August 2023, after the engine repair, the rented engine was installed on the aircraft.
  • 9. The engine rental agreement was terminated on October 30, 2023.
  • 10. Over the span of 20 months, the engine rental incurred a total cost of $2,839,280.
  • 11. From December 27, 2021, to October 30, 2023, when the aircraft was grounded for more than 4 months, it incurred a loss of more than 1.1 billion rupees.

Due to the negligence of the Executive Chairman of Nepal Airlines Corporation, Yuvaraj Adhikari, and senior management, the organization is now facing a serious financial crisis. Executive Chairman Adhikari has been involved in setting up the engine repair and rental of the aircraft.

He did not show any interest in engine repair due to the lure of commission on engine rental. Because of this silly behavior the engine rented for the aircraft ‘9N-AKW’ Sagarmatha has costed around 38 crores in a duration of 20 months of the rental.

Even though the regulation stated that NAC could rent engines for up to 90 days only, Executive Chairman Adhikari, along with the senior management of the corporation, rented engines from the same company for 20 months for the aircraft. The corporation has already spent $2,839,280 for only rental of the engine used in the narrow body aircraft ‘Sagarmatha’.

The aircraft encountered engine problems in Qatar after disembarking on December 27, 2021. The engine problem was observed during technical checks. Engine maintenance was required. The ship was grounded in Qatar for more than two months. The company incurred a loss of more than 60 million rupees during the time the aircraft was grounded.

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When the aircraft was grounded, the corporation incurred expenses even in parking equal to $70,000. Finally, an agreement was reached with the German company MTU to rent engines on March 3, 2022. Engines were rented, and the aircraft came back to flight from March 5. The corporation made an agreement to rent engines at a rate of $2,000 per day, whether the aircraft flies or not.

The executive chairman Adhikari did not show any interest in engine maintenance. The another engine that was broken down in December 2021 was repaired in September 2023. Usually, the engine is maintained within two months. However, the engine that was brought in July 2022 was repaired in August 2023.

Taken from a news in Biznessnews written by Uttam Kapri

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