Nepal Airlines Corporation (NAC) has reportedly decided to lease out or sell its six grounded China-made aircraft.

The national flag carrier has grounded the Y12e and MA60 aircraft since July last year as these were allegedly causing losses, reported Kathmandu Post.

In 2012, Nepal Airlines signed an agreement with Aviation Industry Corporation of China (AVIC) to acquire six aircraft – two MA60s and four Y12es.

Under this deal, China offered grant and concessional loan of $62.13m (CNY408m) for the six airplanes.

Out of $62.13m, a grant of $27.4m (CNY180m) was given by China for one 56-seater MA60 and one 17-seater Y12e aircraft, while the remaining amount was taken as loan by Nepal to procure one MA60 and three Y12e airplanes.

The carrier plans to initially invite offers from national and international bidders to dry lease the aircraft but will go ahead with the sale if there are no takers.

Kathmandu Post quoted Nepal Airlines managing director Dim Prasad Poudel as saying: “Out of the two options recommended by the Finance Ministry—dry lease or outright sale—Nepal Airlines will try the first one.

“We have constituted a committee to determine the lease rate. The panel will submit a report within a week, and we will show it to the board for its go-ahead.”

As of now, only five of the six aircraft are functional and one requires maintenance after crashed landing on the runway of Nepalgunj Airport on 28 March 2020.

The carrier stated that it incurred financial losses due to various reasons including load penalties, insurance, scarcity of spare parts, expensive parts, etc.