The parliamentary Public Accounts Committee (PAC) on Sunday directed the government to induct a foreign strategic partner in Nepal Airlines Corporation (NAC) within three months.

Lawmakers said that the national flag carrier’s performance cannot improve unless it takes on a foreign strategic partner. “The carrier is procuring two Airbus A330 jets, and if its existing style of work is not improved, the jets may become burden to them,” said Lawmaker Rajan KC. 

“Why has NAC been incurring losses even after procuring two A320 jets?” he asked. “This gives ample room to doubt whether inducting wide body jets into its fleet without a proper operation plan will guarantee profits.”   

Lawmaker Dhan Raj Gurung said that NAC’s ground handling service at Tribhuvan International Airport (NAC) was its bread and butter. “If the revenue generated from the ground handling service is separated, its annual losses will amount to Rs1.5 billion.” 

Tourism Secretary Shankar Prasad Adhikari admitted that if the proposed wide body jets are not operated efficiently, the corporation’s losses could balloon. “It’s a big challenge,” said Adhikari, who is also the chairman of the NAC board. Adhikari told lawmakers that they had been preparing request for proposal (RFP) documents to begin the process to inducting a foreign strategic partner. “A bold decision is needed to induct a foreign strategic partner as the trend has been to suspect everything. Things done in good faith are always questioned,” he said.

NAC has been urged to separate its flight operations and ground handling services before taking on a foreign strategic management partner to be able to determine improvements after the move.

A committee led by Tourism Joint Secretary Buddhi Sagar Lamichhane set up to recommend partnership modalities has said that separating NAC’s flight operations and ground handling services was necessary to accurately gauge its performance after the entry of the foreign partner.

NAC’s ground handling service at TIA is a major moneymaker, generating more than Rs3 billion in revenues annually, which is nearly one-third of its total receipts.

This income has masked the losses during the past decades of mismanagement and political interference at the airline and kept it afloat.