Nepal Airlines' Managing Director Sugat Ratna Kansakar on Sunday informed a parliamentary committee about his plan to purchase two new aircraft within this fiscal year.
Kansakar also said that Nepal Airlines will be adding at least one new aircraft to its fleet every year from the next fiscal.
"We cannot turn around the national flag carrier without adding more aircraft to our fleet," he said, answering to questions by members of the Parliamentary Committee on International Relations and Labour.
Nepal Airlines has recently purchased two new Airbus 320s and imported two Chinese aircraft after a gap of 24 years.
Kansakar was summoned by the parliamentary committee to shed lights on Nepal Airlines' management reform plans and, most importantly, reports about financial loss caused by the new Chinese aircraft.
The committee asked Kansakar to submit all documents about the Chinese aircraft within 15 days.
As per a deal between Nepal and China on 28 November 2013, two aircraft manufactured by EVIC China, MA-60 (56 seater) and Y12-E (18 seater), were recently brought to Nepal. As per the same deal, Nepal Airlines will have to bring in four more China-manufactured aircrafts on grant and loan.
Citing loss caused by the Chinese aircrafts due to high insurance cost and expensive as well as not-so-easily-available spare parts, Nepal Airlines has decided to not bring in more aircrafts unless these two problems are sorted out. A high-level committee set up by the government is currently coordinating with China to find ways to lower insurance cost and supply spare parts easily.
Nepal Airlines had insured the new Chinese aircraft only for three months, saying that the deal might be scrapped if problems about insurance and spare persist.
But last week, Nepal Airlines renewed insurance of the Chinese aircraft for one more year, hinting that the deal might not be scrapped. Kanskar told Nepali Times that insurance cost has been lowered this time around. "It would have been impossible to operate the Chinese planes without lowering the insurance cost," he said.