Kathmandu-Nepal Airlines Corporation (NAC) has failed to pay interest and installments on time for loans taken to purchase two widebody and two narrowbody aircraft.

NAC’s total debt, including the Chinese aircraft loan and government loan, has reached Rs 57.63 billion, exceeding its assets by over Rs 10 billion. In 2021, NAC’s assets were estimated at around Rs 52 billion, but this has now dropped by about Rs 5 billion.

NAC took Rs 24 billion in loans in 2017 to purchase two widebody aircraft, but the principal amount has continued to rise instead of decreasing over eight years.

NAC’s debt increased due to the negligence of former Executive Chairman Yuvraj Adhikari, who led NAC for the last four years. He did not pay the installments of the widebody aircraft loan during his tenure and only paid part of the interest.

NAC’s revenue has continued to fall for the past three years because its aircraft remained grounded for long periods. According to the unaudited FY 2024-25 report obtained from NAC, revenue declined compared to FY 2023-24.

NAC earned a total of Rs 20.67 billion in FY 2024-25. In FY 2023-24, revenue stood at Rs 21.05 billion. In FY 2022-23, revenue had reached Rs 23.86 billion.

Revenue declined over the past two years due to negligence in engine maintenance of narrowbody aircraft and C check of widebody aircraft. The long grounding period caused by maintenance delays directly affected income.

Accumulated losses near Rs 20 billion

According to NAC sources, accumulated losses have continued to rise every year. The report obtained by Biznessnews shows that accumulated losses passed Rs 20 billion by the end of FY 2023-24.

In FY 2021-22, accumulated losses stood at Rs 15.18 billion. Due to the negligence of former chairman Adhikari, accumulated losses increased to Rs 15.59 billion in FY 2022-23.

In FY 2023-24, accumulated losses rose by more than Rs 2.5 billion, surpassing Rs 20 billion.

Market share dropped from 25 percent to 11 percent

NAC has been consistently losing market share in recent years. NAC’s market share, which had reached 25 percent in 2020, dropped to 11.28 percent in 2024. Its share fell by 13.71 percentage points in five years.

According to the airport office, 4,963,364 passengers traveled internationally through Tribhuvan International Airport in 2024. Among them, 560,108 passengers flew with NAC. This accounts for 11.28 percent of total international travelers.

NAC operated 3,178 flights and landings in 2024. Outbound passengers totaled 291,246, and inbound passengers were 268,566.

NAC’s market share has dropped abnormally for the past three years. After former Executive Chairman Adhikari took charge, flight operations became unstable. Aircraft spent more time grounded than flying.

In 2024, two widebody aircraft remained grounded for more than three months each. Delays in scheduled maintenance reduced available flights, which caused market share to decline.

NAC’s market share reached 25 percent in 2020. It dropped to 20 percent in 2021 when global flights were restricted due to the pandemic.

Since 2020, international passenger numbers have continued to rise, but NAC’s market share has kept falling. NAC’s market share slipped to 16.56 percent in 2022 and 14.20 percent in 2023. Although international passenger numbers hit record highs for two years, NAC’s market share fell to 11.28 percent in 2024.