Money

NAC, AAR Corp to sign Airbus deal on Friday

- Post Report, Kathmandu

Apr 3, 2017-

Nepal Airlines Corporation (NAC) is set to sign a sales and purchase agreement for two Airbus A330-200 long-range jets with US-based AAR Corp this Friday which will be the largest-ever purchase deal in Nepal’s aviation history. 

The final purchases agreement will also translate the national flag carrier’s two-decade-old dream of flying wide-body jets into reality.

NAC has been attempting to fly the A330 since 1997. The two jets are expected to arrive in Nepal by January and March 2018.

“We are making preparations to sign the sales and purchase agreement this Friday,” said Rabindra Shrestha, spokesperson for NAC.

A team from AAR Corp is scheduled to arrive in Nepal on April 6. 

The NAC board is expected to call a meeting within the next few days to give the management the go-ahead to sign the deal.

The American aviation support company had quoted an ‘offer price’ of $104.8 million for each jet. NAC officials said that the final contract price would not exceed $109 million after adjusting for inflation. 

As per the contract negotiations held between NAC and AAR Corp recently, $40 million will be released as a pre-delivery order payment after the accord is signed.

“The payment modality is yet to be finalized,” said a NAC board member. 

During the negotiations, NAC had asked for 45 days to make the pre-delivery order payment. Under that payment modality, NAC will make a 50 percent down payment within 35 days after the deal is signed, and the rest of the money will be sent to the aircraft supplier within 10 days. 

The national flag carrier has already transferred $1 million as ‘commitment fee’ to AAR Corp. 

Likewise, AAR Corp has agreed to hand over a bill of sale with warranties that assures the buyer the right to the property. The two aircraft that NAC is planning to buy are owned by HI Fly, an airline based in Lisbon, Portugal, the official said. 

A notice inviting proposals from aircraft manufacturers, airlines, aircraft leasing companies and bankers for two Airbus A330-200 aircraft was issued on September 26, 2016. The A330-200 NAC plans to buy can accommodate up to 280 passengers in a two-class layout. 

The supplier is required to include the cost of a minimum set of flight and maintenance crews for the duration of at least one year. It also has to include the cost of consumable spares and tools required for day-to-day line maintenance up to the ‘A’ check level for a year. NAC has announced that it will be launching four new long-haul routes besides resuming its London service after acquiring two wide-body jets in 2018. 

The national flag carrier plans to connect Kathmandu with Seoul in South Korea, Tokyo in Japan, Dammam in Saudi Arabia and Sydney in Australia. It has also announced increasing flight frequencies to key destinations like Kuala Lumpur, Hong Kong and Doha.

Published: 03-04-2017 08:53

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