The foreign consortium selected to supply two Airbus A330-200 to Nepal Airlines Corporation (NAC) has formally placed an order for the aircraft with the manufacturer, indicating that they will be delivered on time.

“Hi Fly has placed its first direct firm order with Airbus for two A330-200s,” said the Airbus website on Wednesday. The orders were placed during the ongoing Paris Airshow.

Six days ago, NAC deposited $79 million into the escrow account held by Norton Rose Fulbright in Europe as advance payment for the two wide-body aircraft. The payment amount is 35 percent of the cost of the jets. 

NAC had signed a $209.6-million contract with the consortium of three companies led by AAR Corp to buy two long-range Airbus A330-200, making it the largest ever aircraft purchase deal in Nepal’s aviation history.

The national flag carrier selected a consortium led by US-based AAR Corp to supply the planes. AAR Corp has formed a special purpose vehicle led by Hi Fly, a Portuguese airline, to procure the aircraft. The new company called Hi Fly X Ireland will specifically look into the procurement process, said an NAC official. 

“Hi Fly X Ireland has been barred from accepting other aircraft delivery orders until it supplies the two aircraft to NAC,” said Buddhi Sagar Lamichhane, joint secretary at the Tourism Ministry, who also sits on the NAC board. 

He added that the special purpose vehicle had been formed for the purpose of managing the transaction on behalf of Hi Fly. “The two jets have been particularly ordered for NAC.” However, NAC’s Managing Director Sugat Ratna Kansakar said that they were yet to confirm the development. “We have released the advance payment to Hi Fly, and it could ‘probably’ be our order,” he said. 

The Airbus website said that the new A330s would feature a two-class cabin layout, seating 18 passengers in business and 256 in economy. 

The order will contribute to Hi Fly’s strategy for long-haul fleet replacement offering its customers—namely airlines, tour operators, governments, companies and individuals—the most cost-efficient and versatile widebody aircraft, said Airbus. 

“We are pleased that Hi Fly has renewed its confidence in the versatile A330-200,” said John Leahy, Chief Operating Officer - Customers, Airbus Commercial Aircraft. “In choosing the versatile A330-200, Hi Fly will offer its customers an aircraft that covers all ranges from short-haul to true long-haul while providing passengers with best in class comfort.”

To date, the A330 Family has attracted nearly 1,700 orders and over 1,300 A330 Family aircraft are currently flying with more than 110 operators worldwide. With an operational reliability of 99.4 percent and various product enhancements, the A330 Family is the most cost-efficient and capable widebody aircraft to date, it said. 

According to NAC, the first of the two planes is expected to arrive in Nepal in May, and the second one by June in 2018. NAC has borrowed Rs24 billion from the Citizen Investment Trust (CIT) and the Employees Provident Fund (EPF) to buy the jets. 

The two lenders have provided Rs4 billion each to NAC as the first installment to allow it to make the pre-delivery payment to the aircraft supplier. The interest rate on both loans has been fixed at 9 percent per annum, and the repayment period is 15 years.