Nepal Airlines Corporation (NAC) has signed a Memorandum of Understanding (MoU) with US-based AAR Corp to buy two Airbus A330-200 long-range jets.

The airlines plans to pay $1 million “commitment fee” to AAR Corp within two to three days to formally confirm the order, said NAC Managing Director Sugat Ratna Kansakar. The MoU was signed on Friday.

“After the commitment fee is sent, we will begin contract negotiations,” he said, adding the negotiations may take at least a month.

A purchase agreement will be signed after the negotiations when the cost of the aircraft will be finalised. The American aviation support company has quoted an “offer price” of $104.8 million for each jet. However, the “contract price” may be slightly different in the purchase agreement, according to NAC.

A notice inviting proposals from aircraft manufacturers, airlines, aircraft leasing companies and bankers for two Airbus A330-200 aircraft was issued on September 26.

The national flag carrier has planned to induct one A330 aircraft into its fleet by September 2017 and another by March 2018. The A330-200 it plans to buy can accommodate up to 280 passengers in a two-class layout.

The supplier should include the cost of a minimum set of flight and maintenance crews for the duration of at least one year. It should also include the cost of consumable spares and tools required for day-to-day line maintenance up to the ‘A’ check level for a year.

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.

NAC purchased two Airbus A320-200 aircraft in 2015 by borrowing Rs10 billion from the Employees Provident Fund in its first fleet expansion in 27 years.

The corporation has been negotiating with the Employees Provident Fund, Citizen Investment Trust and a number of commercial banks to acquire loans at cheaper interest rates. The Finance Ministry has agreed to act as a guarantor for the loan NAC plans to take.

According to Kansakar, NAC board will begin talks on the loans as per the proposal of different financial institutions from Monday.

Nepal Airlines has taken the top spot in international passenger carriage for the first time in years, flying 275,701 travellers during the first nine months of 2016.