NAC concludes contract talks; final deal in MarchNepal Airlines Corporation (NAC) on Wednesday concluded “contract negotiations” with US-based AAR Corp, the supplier of two Airbus A330-200 long-range jets to Nepal’s national flag carrier, laying the groundwork for signing of the final agreement on purchase of first lot of widebody aircraft.
Nepal Airlines Corporation (NAC) on Wednesday concluded “contract negotiations” with US-based AAR Corp, the supplier of two Airbus A330-200 long-range jets to Nepal’s national flag carrier, laying the groundwork for signing of the final agreement on purchase of first lot of widebody aircraft.
During the negotiations that continued for the last three days, both the parties agreed to sign the “sales and purchase agreement” for purchase of the jets by the end of March. With this, NAC is all set to seal the largest ever aircraft purchase deal in its history.
NAC, which has never added a widebody aircraft to its fleet, has already dispatched $1 million as “commitment fee” to AAR Corp for purchase of two jets, which are expected to land in Nepal by January and March, 2018.
Both the sides agreed to settle their own tax liabilities in their respective countries.
Likewise, the final contract price of each jet will not exceed $109 million after adjusting inflation. The American aviation support company had quoted an “offer price” of $104.8 million for each jet.
Under the payment modality, both the sides agreed to release $40 million as pre-delivery order payment a month after the signing of the sales and purchase agreement. “The remaining payment will be made as per the payment schedule agreed by both the parties,” said an NAC official.
Similarly, the AAR Corp delegation agreed to handover a bill of sale with warranties that assure the buyer the right to property. Currently, the two widebody aircraft that NAC is planning to purchase is owned by HI Fly, an airline based in Lisbon, Portugal, the official said. “The negotiation concluded successfully and the draft of the negotiations will be tabled at the NAC board for approval next week,” said NAC Managing Director Sugat Ratna Kansakar. “The board meeting will be held after Tourism Secretary Shankar Prasad Adhikari, who is currently in Russia, returns home.” Tourism Secretary chairs the NAC board.
A notice inviting proposals from aircraft manufacturers, airlines, aircraft leasing companies and bankers for two Airbus A330-200 aircraft was issued on September 26 2016. The national flag carrier has planned to induct one A330 aircraft into its fleet by January 2018 and another by March 2018.
The A330-200 it plans to buy can accommodate up to 280 passengers in a two-class layout. The supplier should include the cost of a minimum set of flight and maintenance crews for the duration of at least one year. It should also include the cost of consumable spares and tools required for day-to-day line maintenance up to the ‘A’ check level for a year.
NAC has announced that it would be launching four new long-haul routes besides resuming its London service after acquiring two wide-body jets in 2018. The national flag carrier plans to connect Kathmandu with Seoul in South Korea, Tokyo in Japan, Dammam in Saudi Arabia and Sydney in Australia. It has also announced increasing flight frequencies to key destinations like Kuala Lumpur, Hong Kong and Doha.