Nepal Airlines to sell five Chinese-made turboprops at a loss. The planes in question are not airworthy and have been grounded for years. The airline had previously tried to lease them but had no takers. They were a financial burden for an airline already struggling with huge debt. The airline accepts that demand for these planes is low and it will have to sell them for much less than it paid a decade ago.
Five aircraft are owned by Nepal’s Ministry of Finance. They were originally procured for an airline for use on underserved mountain routes. The aircraft listed for sale include two MA60 aircraft and three Y12e aircraft. The planes had not been in service long before they were grounded. The aircraft had an unusually high number of maintenance problems for its age and spare parts are hard to come by for this aircraft. In addition to maintenance dilemmas, the airline struggled to find enough qualified pilots to fly the planes and even fewer flight instructors to teach the pilots to fly the plane.
In July 2020, the airline’s management announced that it would ground all Chinese-made aircraft. In December 2020, the airline applied to Nepal’s Ministry of Civil Aviation in the hope of receiving permission to part with the aircraft. After being grounded for two years, the airline finally got the go-ahead.
For these reasons, the Ministry of Finance approved Nepal Airlines’ request to lease the aircraft to another air carrier. The aircraft were put on lease on 14 September. The only parties that can apply for a lease must have a valid Air Operator’s Certificate and at least one aircraft in their fleet. If the aircraft were leased by another air carrier, it would be a bare-bones lease, meaning that the lessor would be responsible for supplying the flights and cabin crew.
The deadline for the bidding period was scheduled for October 31. However, neither side has seriously considered leasing the plane, which is leading the airline to put them up for sale this week. Before the plane was available for lease, the Treasury told the airlines to sell the plane at a loss unless a lessor emerged because it had been burning a hole in the wallet for years. Both sides recognize that the longer these aircraft are unairworthy, the less value they will have. This was stated by former Nepal Airlines board member Ashok Pokhrel.
Several aircraft have already begun to show signs of corrosion. The next owner will probably use the planes for parts rather than go through the trouble of getting them airworthy again. The airline’s experience with these aircraft has shown that aftermarket support is limited, leading many operators to opt for aircraft produced by established Western manufacturers.