NAC in final stage of selling its Boeing 757-200 aircraft to American company

KATHMANDU : In order to sell its Boeing 757-200 aircraft, the national flag carrier Nepal Airlines Corporation (NAC) has sent a final agreement to the American company CSDS Aircraft Sales and Leasing Company. Stating that the sale process could not be taken forward earlier due to the long lockdown, the NAC said that the process would be completed soon.

The corporation had invited bids for a third time after the aircraft could not be sold in the first and second auction. The corporation had decided to sell the aircraft through an auction in its third attempt. The company had already paid five percent interest to the corporation after the first phase of the agreement was reached.

As the aircraft could not be sold even through the second tender, as per the law, the NAC decided to sell the aircraft through ‘mutual discussions’. The corporation agreed to sell the aircraft for 7.71 million US dollars under the same rules, but the process could not be completed due to the COVID-19 pandemic. The aircraft is currently grounded at Tribhuvan International Airport in Kathmandu.

The corporation had also formed a negotiation sub-committee to sell the aircraft via auction. Dim Prakash Poudel, general manager of the corporation, said that the sale process has moved forward after the study of the sub-committee suggested to sell the aircraft to CSDS, out of the three companies who had proposed to buy the aircraft.

“CSDS has been in constant touch with us for the last eight months and we have sent the final agreement to it after multiple requests from the company,” Poudel told Republica. The corporation had called for the first bid with a time limit of 45 days on June 26, 2019, but all the three companies were not ready to pay the desired price. The NAC then called for the second bid with a time limit of 15 days in August. The corporation did not get the value it had quoted from the call.

After that, three foreign companies showed interest after the corporation invited bids with attractive discounts for the third time in November last year. The corporation had set the minimum price of the aircraft for the third time at USD 487.2 million.

Initially, the airline had stated that the minimum valuation of the aircraft would be USD 7.676 million, but the aircraft, which has been grounded for almost two years, is being sold as the company has to spend a lot of money on maintenance. Madan Kharel, the then executive chairman of the corporation, had put pressure on the company to sell the aircraft soon stating that it could only be flown until February 2020.

Meanwhile, some documents of the aircraft have expired. “But even now, there is no problem in flying the aircraft once the necessary paperwork is completed,” said a source at NAC. The 190-seater aircraft, which has flown 89,000 hours, has two Rolls-Royce engines. The corporation bought the aircraft under a loan from the American Boeing Company in 1980.

The corporation has already decided to remove the Chinese aircraft saying that it has not been able to make commercial profit. According to the officials of the corporation, two Avro, one Boeing 727 and two 757 aircraft of NAC that are currently grounded, may have to be kept in a corner of the airport if they are not processed for sale soon.

Republica