Nepal Airlines Corporation (NAC) has prepared an international fleet expansion plan under which it will buy four new jets over the next two years, with the first one scheduled to join its fleet next December.

The national flag carrier will be adding two-wide body and two narrow-body aircraft in line with the government’s two-year immediate action plan launched last week. The second of the two wide-bodies is expected to be inducted into the fleet by February 2017.

Likewise, NAC plans to procure the first of the two narrow-body aircraft by May 2017 and the second by July 2017, according to the corporation’s project proposal. Tourism Ministry officials said that NAC would be sending its detailed business plan to the ministry by mid-January.

The proposal will be forwarded to the Finance Ministry by February for its examination and arrangement of funds, officials said. After the Finance Ministry okays the plan, the Tourism Ministry will present it to the Cabinet, probably by mid-March.  

“We are at the final stages of the preparations of the business plan,” said Ram Hari Sharma, spokesperson of NAC. “The management will show the plan to the board as soon as it is completed.” The business plan basically includes financing arrangements and potential future markets for NAC, Sharma added.

The national flag carrier purchased two Airbus A320-200 aircraft this year by borrowing Rs10 billion from the Employees Provident Fund, its first fleet expansion in 27 years.  Recently, the Finance Ministry had told NAC to show a viable and trustable business plan first when it said it wanted Rs26 billion to buy two wide-body jets.

The carrier has proposed procuring long-range jets to serve destinations in North America, Japan, Australia and the UK as they have been identified as prospective markets for Nepal over the next 20 years. The Finance Ministry has assured NAC that resources could be arranged through internal sources or through international financing agencies if it is convinced by the business plan.

NAC has had to ask the Finance Ministry for money as it owes Rs14 billion to various creditors, and all its assets have been put up as collateral.

Presently, NAC holds a meagre 5.87 percent share of the market in the international segment. It flew 206,430 passengers last year.

The carrier serves seven international destinations, including three Indian cities, and plans to expand operations to three more destinations, namely Guangzhou, Dubai and Saudi Arabia in the near future.

A decade ago, NAC was flying to 21 international destinations. Its international network has shrunk rapidly since then reflecting the rot in the company caused by mismanagement and political interference.