Sell Soaltee Hotel share, and buy new plane

Kathmandu, Oct 2: The Nepal Airlines Corporation (NAC) Reforms Recommendation Committee has suggested that more capital should be investment to make the national flag carrier more competitive.

The Committee led by former Governor of Nepal Rastra Bank (NRB) Dipendra Bahadur Chhetri submitted its report to Minister for Culture, Tourism and Civil Aviation Sudan Kirati on Sunday stating that additional capital should be invested for the elevation of the NAC.

CA Piyus Anand, Captain Om Gurung, Tikaram Rai and Sahara Neupane were the members in the Chhetri-led five-member Recommendation Committee.

“Evidences are there that the concerned governments provide capital to the international airlines companies in need in the special circumstances. Considering this fact, the government should take the state-owned Corporation in a competitive state by investing additional capital amid other competitors,” according to the report.

Currently, the NAC is reeling under serious crisis with negative net worth of Rs 4.9 billion till the fiscal year 2078/079 BS. The total loan of the NAC stands at Rs 48.3 billion.

The committee recommended to sell it’s share in five star Soaltee Hotel Ltd.  According to reports, the NAC holds 1 crore 3 lakh and 33,699 shares in the hotel. The share price of Soaltee is Rs. 443 per share in the stock trading. Accordingly the NAC can collect nearly Rs 4.5 arba.

The Ministry of Civil Aviation is trying to buy planes for domestic use, however the NAC has not been able to raise such funds.

The report has pointed out the NAC should explore ways to receive concessional loan and increase its business to reduce its loan. The state owned public holdings Employee Providend Fund and Citizen Investment Trust have refused to inject more fund to NAC. Both the public entities have to receive billions of rupees from NAC which was used to buy four Airbus airplanes.

Likewise, the Committee has recommended that the Chief Executive of the NAC should be appointed through an open competition by a committee under the leadership of National Planning Commission Vice-Chairman.

Likewise, management contract is also suggested to embrace modern management system.

Furthermore, the Committee has recommended that the NAC could be run in a company model by welcoming a strategic partner.

The corporation has forwarded a 10 year plan which included buying 15 airplanes by 2025. The plan includes buying 2 narrow body plane by 2023, 1 wide body and 2 narrow body plane by 2024, and 1 wide body plane by 2025.