NAC’s long-awaited Airbus A330 airliner arrives today

June 28, 2018

Sangam Prasain, The Kathmandu Post, 28 June 2018

Nepal Airlines Corporation (NAC) will finally welcome its first long-range Airbus A330 at Tribhuvan International Airport (TIA) on Thursday, culminating a bizarre procurement process that began nearly a decade ago and was marked by corruption charges, parliamentary hearings and imprisonment of its top brass.

The arrival of the A330-200 jet will put the national flag carrier in the company of long-haul airlines. The new aircraft, powered by Rolls-Royce Trent 700 engines, features a two-class cabin configuration and seats a total of 274 passengers—18 in business class and 256 in economy class.

The jet is expected to touch down at TIA at 8:30 am. NAC ordered two 274-seater jets through Portuguese leasing company Hi Fly. The second jet is expected to arrive by July-end. “After 10 years, the A330 jets will finally arrive,” NAC Managing Director Sugat Ratna Kansakar posted on his Facebook page.  

On Oct 26, 2009, the NAC board had decided to purchase two aircraft from Airbus-an A320-200 (narrow body) and an A330-200 (wide body) to expand its international fleet.

In December 2009, with controversy surrounding the purchase process, the then Public Accounts Committee (PAC) directed the government to cancel the deal while the Ministry of Finance directed the Tourism Ministry to scrap the purchase process on May 25, 2010. Kansakar was also jailed for alleged irregularities.

The order eventually halted NAC’s expansion plan for three years. The deal was revived in June 2013, but the order was changed to two A320s. The two A320s were delivered in 2015.

The plan to equip NAC with wide body jets was revived by Kansakar after he was re-appointed the managing director of the corporation in May 2015. In April last year, NAC signed the final purchase agreement for two Airbus A330-200 long-range jets from US-based AAR Corp. The $209.6-million contract is the largest-ever jet purchase deal in Nepal’s aviation history.

The arrival of two wide body jets has been described as a ‘game-changing event’, allowing NAC to compete with other international players on long-haul routes in Europe, Japan and beyond. “But, if it is not utilized prudently and commercially, it can push the national flag carrier into bankruptcy,” said Ashok Pokhrel, a former member of the NAC board of directors.

“The corporation should totally change its traditional working style and adopt new technology and marketing strategy,” he said. The national flag carrier could go broke if it does not adopt the latest market strategy and technology to compete with rivals, said Pokhrel.

NAC is neck deep in loans. It owes nearly Rs40 billion to various institutions, and has to pay at least Rs3.5 billion in interest annually. It has been planning to take another loan of Rs12 billion to procure two A320 jets soon.

It’s challenging. The A330, with its long haul capability, needs to increase its passenger market share to at least 30 percent to survive in the market, according to airlines officials.

NAC Deputy Managing Director Ganesh Bahadur Chand said that they expected to put the aircraft into commercial service in 15-20 days after finishing the paperwork with the Civil Aviation Authority of Nepal.

“However, we will not fly on new routes immediately as the new machine needs to become familiar with the old routes,” he said, adding that the jet would operate on the Doha, Dubai and Bangkok sectors for at least a month. “We have planned to fly to Riyadh, the capital and most populous city in Saudi Arabia, as a new route and connect Japan and South Korea in the second phase.”