NAC Faces Losses as Airbus Sagarmatha Remains Grounded

Since December 25, an airbus A320 belonging to Nepal Airlines Corporation (NAC) has been grounded at New Delhi, India due to a damaged engine. Though NAC is working to fix the issue, it has been racking up losses with each passing day, reports The Kathmandu Post.

The airbus with registration number 9N-AKW, named Sagarmatha has been grounded at the Indira Gandhi International Airport for over a month now.

On the basis of the estimated annual income of Rs. 1.2 billion for each of NAC’s aircraft, NAC is losing nearly Rs. 100 million per month. Adding to the loss of revenue, NAC also has landing and parking charges, cost of repairing the damaged engine and the rental for a replacement engine.

NAC Managing Director Sugat Ratna Kansakar said that NAC was unable to determine the total loss immediately. He said, “Profit and loss are part of the operation. If the aircraft is grounded, it’s definitely a loss.”

He informed that NAC had found a replacement engine for a temporary period and that NAC will be leasing the engine soon. The lease could cost $150,000 per month.

NAC is not sure when the damaged engine will be repaired. Though Kansakar says that it may take at least three months.

In the meantime, NAC is preparing to invite bids for ‘power by the hour’ program that will allow it to accurately forecast cost and free it from purchasing stocks of engines and accessories.

According to Kansakar, this will protect the lease from unexpected costs of premature engine failure.