Yeti Airlines Receives Triple B Minus Rating Ahead of IPO

4th September 2025, Kathmandu

Yeti Airlines has received a Triple B Minus (BBB-) issuer rating from Infomerics Credit Rating Nepal, an important step before its planned Initial Public Offering (IPO).

Yeti Airlines Receives BBB- Rating

This rating indicates a moderate degree of risk in the airline’s ability to meet its financial obligations, serving as a key measure of its financial strength for potential public investors.

Financial Resilience and Operational Recovery

Yeti Airlines’ rating reflects its strong recovery and improved financial performance following a tragic air crash in fiscal year 2080/81. In the first nine months of the current fiscal year, 2024/25, the airline demonstrated significant growth, with a 29 percent increase in operating income and total revenue reaching NPR 4.11 billion. The airline’s passenger load factor also saw a notable increase, climbing to 82 percent in FY 2024/25 from 78 percent in the previous fiscal year, which signals both a recovery in demand and enhanced operational efficiency.

The airline’s resilience is further highlighted by its improved profitability. Its net profit margin reached 5.47 percent in the third quarter of FY 2024/25, a significant increase from just 2 percent in the previous fiscal year. This positive trend in profitability and a 26 percent growth in profit before tax between the last two fiscal years are key indicators of effective cost management and a successful turnaround strategy.

The company also expanded its operational capacity by bringing in Asian Life Insurance Company as a strategic partner, adding two aircraft to its fleet and expanding its service coverage. This partnership has been crucial in strengthening the airline’s operations and market presence. With a fleet of seven aircraft, Yeti Airlines maintains a solid 21 percent market share in Nepal’s competitive domestic aviation industry.

Rating Breakdown and Its Meaning for Investors

Infomerics Credit Rating Nepal’s assessment provides a detailed view of Yeti Airlines’ financial standing, rating both its long-term and short-term debt.

Long-Term Debt: The airline’s total long-term debt, which includes NPR 2.95 billion in loans from banks and financial institutions and a USD 27.1 million equivalent in foreign currency loans, has been assigned a BBB- rating.

Short-Term Debt: Its short-term debt, amounting to NPR 757.3 million, has been rated A-3. This rating signifies an adequate degree of safety regarding timely repayment, offering reassurance to lenders.

The BBB- issuer rating provides prospective IPO investors with crucial insights. While it doesn’t suggest a risk-free investment, it indicates that the company has a moderate but stable capacity to meet its financial obligations. This rating, combined with the airline’s impressive financial recovery and strategic moves, offers a cautiously optimistic outlook. For investors, this IPO represents a rare opportunity to invest in Nepal’s aviation sector, which is a vital part of the nation’s economy and tourism industry.

Conclusion

Yeti Airlines’ Triple B Minus (BBB-) rating from Infomerics Credit Rating Nepal marks a significant milestone as it prepares to enter the capital market. The rating underscores both the inherent risks of the aviation sector and the company’s remarkable resilience and growth potential. With rising revenues, an improved passenger load factor, stronger profitability, and strategic partnerships, Yeti Airlines has demonstrated its ability to recover from a major crisis and stabilize its financial position. As the company gets ready for its stock market debut, its performance will be closely monitored as a bellwether for the health of both Nepal’s aviation industry and its rapidly evolving capital market.

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