Plagued by frequent groundings of its two 15-year-old 757s, Royal Nepal Airlines announced last year it was adding another jet to stabilise schedules. But plans to lease the third jet has been delayed by serious differences between board members about the kind of aircraft.
Insiders say the dispute is due to vested interest groups represented in the board trying to push different models of Boeing aircraft without looking at the airline's immediate needs or longterm sustainability. The indecision, coupled with the grounding of one of the airline's 757s in Shanghai this weekend, has worsened the corporation's financial crisis.
Some members of the airline's board of directors are putting pressure on management to lease-purchase a brand new Boeing 777, while others are pushing for a 757, still others want the airline to buy a 767 off Air Brunei.
"We have been unable to decide on the matter," says RNAC Managing Director MP Khanal. "One thing or another keeps us from meeting and deciding on the issue." Khanal refused to comment on differences within the board.
Frequent grounding of its 757s for technical reasons has dented the airline's image and resulted in colossal losses. The airline's two jets are overstretched up to 15 hours a day each, limiting maintenance time. One of the jets needs a 'C-check' in April and the airline needs a replacement jet for two months anyway. In effect, the airline is now looking at leasing two jets in the immediate future.
But airline officials believe there are ulterior motives to go for leases instead of purchasing a plane. "We have warned them: if they lease an aircraft instead of purchasing one, we will not allow it to fly," says Capt YK Bhattarai, Chairman of National Airlines Pilots' Association (NAPA).
One board member, Basanta Mishra, denies there are differences among the directors. "It is nothing like that, it's just that we haven't come to a final decision yet," he told us. For management, that is exactly why the situation is worrying: by dragging things till the last moment, the airline has in the past been forced to sign faulty or sometimes fraudulent lease agreements. During the last 12 years, when the corporation had numerous political appointees as managing directors, everyone recommended RNAC opt for lease-purchase of aircraft because it was the only way the airline could own its own equipment. The ideas were never implemented.
The government is not doing anything about the lease-purchase scheme because it has already decided to privatise the airline's international operations. A report by International Civil Aviation Organisation (ICAO) to value current assets and recommend a privatisation strategy is due soon.