Kathmandu-Delays in appointing a Managing Director at Nepal Airlines Corporation have created a risk that its  wide body aircraft used for international flights could be grounded.

NAC needs to float tenders for the repair and leasing of four engines for its two wide body aircraft. This has not moved forward due to the absence of permanent leadership. Although board member Amrit Man Shrestha has been given the responsibility of Acting Managing Director, he has not been able to proceed because the contracts involve large amounts.

Engine repair and engine leasing are estimated to cost more than Rs  10 billion. NAC sources say all required documents are ready, but the process has not moved forward at all.

NAC’s two wide body aircraft could be grounded by June at the earliest and by July at the latest. Wide body engines must undergo maintenance after completing 6,000 cycles.

When one wide body aircraft is grounded for a single day, NAC loses at least Rs 15 million in revenue. NAC is already facing a financial crisis. Grounding of aircraft would push it into deeper trouble.

NAC’s liabilities have already exceeded its assets. According to sources, NAC will either need to take additional loans to cover engine repair and leasing costs or the government will have to provide funds.

Amid this financial strain, NAC has adopted a cycle saving policy and is operating limited wide body flights, which has reduced revenue.

Despite this situation, the Ministry of Culture, Tourism and Civil Aviation has not been able to move forward with the Managing Director appointment process, even though it called for applications on November 13.

Nineteen candidates applied for the position. Although the process was initiated with a plan to appoint a Managing Director within one month, nearly two months have passed without completion.

Ministry Secretary Mukunda Prasad Niraula says the appointment process is ongoing. He admits there has been some delay. He says the documents of the 19 applicants are currently under review and a shortlist will be published within a few days.

A writ petition related to the Managing Director appointment has been filed at the Supreme Court, and a show cause order was issued. The ministry has already submitted its response. The secretary claims the process will be concluded within a few days.

If the appointment process continues to be delayed, NAC’s wide body aircraft may be grounded. Rushed decisions at the last moment could also increase costs. This would create additional financial pressure on NAC.