1st July 2025, Kathmandu
Nepal’s national flag carrier, Nepal Airlines Corporation (NAC), marked its 67th anniversary since its establishment on July 1, 1958. The airline began its journey with a 28-seater Douglas DC-3 Dakota and now operates with wide-body Airbus A330-200 series aircraft for international services.
Nepal Airlines Debt Crisis Outlook
However, despite its long history, NAC continues to struggle with declining market share and a staggering debt of approximately NPR 50 billion.
Limited Domestic Reach And Aging Fleet
Currently, Nepal Airlines operates international flights to New Delhi, Bangalore, and Mumbai in India; Hong Kong, Malaysia, Thailand, Narita in Japan, Doha in Qatar, Dubai in the UAE, and Riyadh in Saudi Arabia. It utilizes two Airbus A330 wide-body and two A320 narrow-body aircraft for these international routes.
Domestically, NAC provides air services to remote airports using only two Twin Otter aircraft, highlighting a significant shortage of planes. This aircraft limitation has resulted in a declining presence in the domestic market, where competition from budget airlines has intensified.
Debt And Operational Challenges
The corporation’s financial strain is largely attributed to loans taken from the Employees Provident Fund and Citizen Investment Trust to purchase wide-body aircraft. However, challenges in the effective utilization of these aircraft, coupled with strong competition from low-cost carriers, have led to a deterioration in the airline’s reputation.
Despite this, the airline’s ground handling services and commercial promotions on international routes have helped slightly uplift its standing in recent years.
Calls For Reform Remain Unimplemented
Numerous study committees have been formed over the years to recommend reforms for the corporation’s improvement. However, none of the recommendations have been successfully implemented. Even though the Ministry of Culture, Tourism, and Civil Aviation has introduced various plans for managerial reform, their execution remains largely unfulfilled.
NAC spokesperson Subash Dangi claimed that all four wide-body aircraft are operating at full capacity on international routes. He acknowledged the limited number of aircraft in the domestic fleet, making it difficult to expand services across all destinations. Dangi also revealed that efforts are underway to launch services to new international destinations.
67th Anniversary Celebrations
Unlike previous years, where NAC held grand ceremonies, recent anniversaries have seen more modest celebrations. This year, the airline organized a friendly football match at the ANFA Ground in Satdobato. The event featured separate competitions among male staff, female staff, and executive groups of the airline. Other events included an open poetry competition, a table tennis tournament, and a morning procession at the airline’s central office premises.
Outlook
As Nepal Airlines enters its 68th year, its operational challenges, heavy debt burden, and limited domestic reach underscore the need for immediate and effective reforms. Without decisive action and strategic management, Nepal’s national carrier risks further erosion of its relevance in both domestic and international aviation markets.
For more:- Nepal Airlines Debt Crisis Outlook