Nepal Airlines seeks Rs 5b to buy 6 Twin Otter planes

Monday, June 25th, 2018 | | Money

Nepal Airlines Corporation (NAC) has asked the government to make a Rs5 billion equity investment in order to raise money to buy six Viking Air DHC6-400 Twin Otter aircraft.

“We have planned to mobilize the equity investment to procure six Short Takeoff and Landing (STOL) aircraft,” said Sugat Ratna Manandhar, managing director of NAC. “This is the first installment of the Rs20 billion that we have sought from the government to raise NAC’s paid-up capital to support its financial restructuring plan.”

The proposal has been sent to the Finance Ministry even though it has not been approved by the NAC board of directors. The Twin Otters are expected to cost $7 million each.

On Friday, Tourism Minister Rabindra Adhikari told Parliament that NAC would procure six Twin Otter aircraft within the next six months. Accordingly, the corporation has invited bids from pilot recruiting companies to supply pilots on a contract basis.

The national flag carrier requires 21 captains to fly the Twin Otters. The captains will be asked to sign contracts of one to five years.

Recently, a committee formed by NAC’s management had recommended buying six new Twin Otter aircraft to serve the domestic sector.

The corporation plans to purchase Twin Otter aircraft to expand its remote area services as it has not been able to fly its four Chinese-made Y12e aircraft due to varied problems like regulatory limits and a shortage of pilots to fly them.

Two of the four 17-seater aircraft were brought in 2014 to serve remote mountain airfields. However, NAC has not conducted test flights to any mountain airfield. The aircraft are being used to serve the Pokhara and Simara sectors only.

The Twin Otter made its first appearance in Nepal in 1971 as a replacement for the DC-3 Dakota, the workhorse of the then Royal Nepal Airlines Corporation. The sturdy Twin Otter was instrumental in opening up Nepal’s mountainous hinterlands, and provided a vital transportation lifeline to remote communities.

The de Havilland Canada DHC-6 Twin Otter, currently marketed as the Viking Air DHC-6 Twin Otter, is a Canadian 19-passenger STOL utility aircraft developed by de Havilland Canada and is currently produced by Viking Air.

In 2005, Viking purchased the Type Certificates for all of the out-of-production de Havilland aircraft, including the Twin Otter. After an extensive market analysis was conducted, it was determined that an overwhelming demand existed to bring the Twin Otter back into production, thus the Viking Series 400 Twin Otter Production Programme was announced in 2007.

The first production aircraft was delivered in 2010. In Nepal, private carrier Tara Air is the first customer of the Viking plane.

NAC has said that it has enough manpower, like engineers and pilots, to fly the DHC-6 Twin Otter.

The carrier’s move comes at a time when demand for air transport service has gone up sharply in remote areas. The corporation said that it is their social obligation to fly to remote areas, although the potential of service expansion to far-flung destinations is yet to be fully tapped by private airlines.

The national flag carrier’s domestic fleet consists of nine planes, including three vintage Twin Otters. During its heyday, NAC used to operate 18 aircraft–12 Twin Otters, three Avros and three Pilatus Porters–on domestic routes. Between 1972 and 1979, the Canadian International Development Agency donated seven Twin Otters to NAC.