Nepal Airlines Auctions Grounded Chinese Aircraft After Three Years of Inactivity

Nepal Airlines Corporation (Nepal Airlines) has officially announced the auction of five Chinese airplanes, consisting of two MA-60 and three Y-12E aircraft, following three years of inactivity at Tribhuvan International Airport. The decision to sell the aircraft in their current condition has been made, with the highest bidder securing ownership.

A secret sealed tender has been initiated, with the application deadline set for February 4, 2023. The sealed tender process ensures a fair and confidential bidding process for potential buyers.

The acquisition of these aircraft by Nepal involved a total expenditure of 6.67 billion 10 million rupees, facilitated through grants and soft loans. Notably, two MA-60 and one Y12 aircraft were donated by the Chinese government, while the remaining four airplanes were procured under the government-to-government procurement system with a concessional loan from China’s Exim Bank.

Despite the initial investment, challenges such as a lack of pilots, inadequate maintenance and spare parts, high fuel consumption, and overall non-profitability have led Nepal Airlines Corporation to ground these aircraft. One of the Y12 planes met an unfortunate end with a crash in Nepalgunj.

The decision to auction the grounded airplanes comes after the corporation’s assessment that operating these aircraft results in significant financial losses. Nepal Airlines has been operating four airplanes successfully on international routes, including destinations such as Delhi, Mumbai, Bangkok, Hong Kong, and more, utilizing two Airbus-320 and two Airbus-330 series planes.

Since their import from China in 2071 for domestic flights, the corporation has faced an average annual loss of Rs 38 crore from the operation of the six aircraft. Despite recommendations to the government to take over the airplanes or explore leasing options, the lack of interest has led to the decision to proceed with the auction.

The sealed tender process aims to identify a buyer willing to acquire the aircraft, and the highest bid received by the February 4 deadline will determine the new owner of these grounded Chinese airplanes.

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