Nepal Airlines makes $14.7m pre-delivery payment to Airbus

Nepal Airlines makes $14.7m pre-delivery payment to Airbus

KATHMANDU, JUL 16 -

Nepal Airlines Corporation (NAC) on Monday made a pre-delivery payment for the two A320-200 aircraft it has ordered from Airbus. The national flag carrier has sent US$ 14.7 million to the plane maker, which is 8 percent of the $ 150 million catalogue price.

“With this payment, Airbus will now start making the aircraft NAC has ordered,” said Keshab R. Sharma, NAC finance director.

Although, NAC had pledged to send the pre-delivery amount to the manufacturer within five working days after the purchase agreement was signed, payment was delayed after the central bank refused to provide foreign exchange facility citing inadequate paperwork.

On June 27, NAC confirmed its order for two jets by signing an aircraft purchase agreement with Airbus. After the payment deadline expired on July 4, NAC asked for an extension.

“The payment was delayed by almost three weeks. However, it will not affect the delivery schedule of the jets,” Sharma said. As per the agreement, Airbus will deliver the first aircraft in February 2015 and the second in April.  

NAC was unable to send the payment on time as Nepal Rastra Bank had asked it to get the Finance Ministry’s approval first for foreign exchange facility. The Finance Ministry, however, said its okay was not required as NAC’s line ministry had given its recommendation. Sharma said they would be sending two instalments on Aug 1 and Oct 1. Under the agreement, NAC has to pay 22 percent of the catalogue price before delivery.  

NAC has borrowed Rs 10 billion from the Employees’ Provident Fund to finance its fleet expansion plan. On May 30, a Cabinet meeting directed the Finance Ministry to sanction a loan for NAC to procure jets.

Meanwhile, officials said a committee formed to evaluate the leasing of two Airbus jets for NAC has submitted its report. The report has been tabled at the NAC board for further consideration.