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NAC-Airbus deal could stir controversy
KATHMANDU, NOV 17 - Airbus has formally announced it will be selling two aircraft to Nepal Airlines Corporation (NAC). NAC and Airbus formalised a Memorandum of Understanding (MoU) at the Dubai Air Show.
The MoU signed by the two sides on Nov. 6 in Kathmandu has now been formalized by Airbus,” said Raju K.C., deputy managing director of NAC. On Nov. 7, NAC paid US$ 750,000 (around Rs. 56 million) as ‘commitment money’ to Airbus.
The NAC decided to purchase Airbus A320-200 (narrow body) and A330-200 (wide body) on Oct. 27 following evaluations of competing proposals from two leading producers of passenger jets — France-based Airbus and US-based Boeing.
But the deal is likely to stir up controversy. Two days after NAC’s decision, Jeffrey A. Moon, Charge d’ Affaires at the US Embassy in Kathmandu had sent a letter to Prime Minister Madhav Kumar Nepal to weigh in Boeing’s bid as well. He urged Nepal to ask the Ministry of Tourism and Civil Aviation and the NAC “to grant Boeing’s request for an open mee-ting to validate its performance and economic data.”
Moon, in his letter, states, “Boeing argues that its narrow-body aircraft is actually US$ 10.4 million cheaper when you factor in operational and maintenance costs over the life time of the aircraft, something the NAC apparently has not done.” However K.C. said, “NAC board decided to purchase from Airbus on the basis of detailed study.”
The deal goes ahead despite warning from the Center for Asia Pacific Aviation (CAPA), a consultant hired by NAC to review its business plan to purchase new aircraft that NAC would lose US$ 20 million annually if the planes were purchased. The Public Accounts Committee has also asked NAC to halt the purchase until it develops a detailed business plan. It has summoned NAC management on Nov. 23.
When asked to comment on the letter from the U.S. embassy, K.C said NAC had “no idea” about the letter.
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