NAC inks deal to buy two Airbus

National flag-carrier Nepal Airlines Corporation (NAC) is expected to get a new lease of life soon, as it has finally signed an aircraft purchase agreement with European aircraft manufacturer Airbus. This is the first time in 26 years that NAC--which had earned a derogatory title of ´No Aircraft Corporation´ for dearth of airplanes -- is adding new aircraft to its fleet. NAC´s plan to purchase new aircraft was confirmed on Thursday after NAC General Manager Madan Kharel and NAC Corporate Director Ganesh Bahadur Chand signed an agreement with Airbus. Airbus Senior Sales Director Sheel Shukla and Airbus Sales Contracts Director Rob Gordon inked the deal on behalf of Airbus. NAC board of directors had finally decided to purchase two new aircraft after holding a marathon meeting that extended from 5 pm Wednesday to 1am on Thursday. The NAC management had inked the deal with Airbus after the meeting endorsed a decision to purchase new aircraft. “Our five-year-long effort to purchase new airplanes has finally yielded positive result,” an elated Chand told Republica Thursday. “It´s now confirmed that NAC will finally get two new aircraft.” NAC, which had signed a preliminary purchase agreement with Airbus in April, is purchasing two A320-200 aircraft. A320-200 is a single aisle, or narrow body, aircraft with seating capacity of 150 persons. But NAC is planning to extend the seating capacity to 164 once it receives the aircraft. Airbus has expressed commitment to deliver the first aircraft within February 2015 and another in the next two month´s time. Each of these aircraft bears a catalogue price tag of US$75 million (approximately Rs 7.2 billion). NAC has already made an advance payment of $500,000 to Airbus. As per the agreement, the airline company will have to initially pay 30 percent of the cost of the aircraft and make the remaining payment on the day the delivery is made. The cash-strapped NAC has already signed a loan agreement of Rs 10 billion with state-owned Employees Provident Fund (EPF) to finance its purchase. EPF, which is extending the credit at 12 percent interest, has given NAC 15 years to clear the loan amount.