Nepal Airlines Corporation signs Rs 12b loan agreement with EPF

Nepal Airlines Corporation canceled its Kathmandu-Doha-Kathmandu flights on Sunday after Iran refused to allow overfly permission in its airspace citing a due amount that NAC failed to settle for years.

According to a source at NAC, the due amount as claimed by Iran aviation stands at mere Euro 11,280. A few years ago, NAC started using Muscat and UAE airspaces to reach Doha.

Now, NAC has to operate its flights to Qatar’s capital through Iran airspace after some of the Gulf countries imposed airspace restrictions on flights to and from Doha after cutting ties with Qatar. “Iran allowed two flights using its airspace last week but it refused to allow overfly permission yesterday citing the due amount.”

Nepal Airlines Corporation(NAC) signed a Rs 12-billion -loan -agreement with state-owned lender Employees Provident Fund (EPF)  on Sunday to buy two wide-body airplanes.

As stipulated in the loan agreement, NAC will pay interest to EPF at the annual rate of 9 percent.

The loan it will take from EFF is just half of the total loan it needs to purchase two wide body airplanes. It has a plan to borrow Rs. 6 billion from Citizen Investment Trust (CIT).

According to a senior captain, Sunday’s incident clearly reveals how the national flag carrier is being operated to the international destinations. NAC officials were discussing the payment issues with its India-based agent Freedom Aero Services requesting the latter to manage a flight to Doha with 178 passengers for Tuesday, a senior NAC official said, adding that the same agent had managed two NAC flights to Doha last week.

Interestingly, Himalaya Airlines easily manages timely payment to its parties in Iran to use the same airspace for its regular Doha flight.

“It’s also about gross negligence on flight operations matters on part of the incumbent NAC management that is obsessed with grandiose designs of wide-bodies,” the senior captain commented.

“ We signed an agreement on loan amounting to Rs 12 billon with EPF on the condition that NAC shall pay interest to EPF at the annual rate of 9 percent “, said Corporate Director and Spokesperson of NAC Rabindra Shrestha.

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