KEDAR DAHAL
KATHMANDU, March 17
The Nepal Airlines Corporation (NAC) board, Tourism Ministry and Finance Ministry seem positive to hand over management of the national flag carrier to Lufthansa Consulting of Germany.
The line ministry wants to hand over management of the NAC to a foreign company feeling that challenges have been increased with arrival of the new Airbus. The ministry had written to Lufthansa on January 21and sought proposal. Lufthansa had sent a 81-page proposal to Minister Deepak Chandra Amatya four days later hinting about its wish to handle management.
Both the line ministry and Finance Ministry seem positive toward the Lufthansa proposal in the preliminary stage. Finance Minister Dr Ram Sharan Mahat has given a positive response toward that. “Foreign strategic partner is necessary for the NAC as the institution that fails to adopt new technologies eventually sinks down,” he said during the meeting of the Development Committee of parliament on Monday. “The current Airbus is of modern technology but management of our NAC has been operating in the old style. The proposal of Lufthansa to improve its management is positive,” he added.
Minister Amatya is trying get a decision in favor of Lufthansa after finding the Finance Ministry positive. Preparations are on to call Lufthansa team to Nepal soon for dialogue. The NAC board, meanwhile, has opened the way for moving the Lufthansa proposal forward while putting its opinion on the issue. The Tourism Ministry, through a secretary level meeting, had sought the opinion of NAC board on the Lufthansa proposal. The board had sent its opinion to the ministry only four days ago.
Air France had taken over the whole management of the then RNAC in 1970 and left after two years. The NAC currently suffers a monthly loss of Rs 3 million.
What has Lufthansa proposed?
Lufthansa has proposed to handle management of the NAC in three stages—operation, marketization and engineering—according to a copy acquired by Karobar. It estimates that this will take up to four years. It has proposed to add four narrow-body airplanes in the first two years. It has proposed to handle management for up to 12 years after agreement with the Nepal government following a review after four years. It has proposed that NAC should pay 295,000 euros and two percent of its total income in consultancy fee.
The German firm has also proposed to work by formulating a professional plan for 2020 and also implement the plan of NAC. The NAC has prepared a 10-year commercial plan and targeted to operate with 24 planes by 2024.
The second stage of the proposal has plan for interim management at start. Lufthansa will have a project director and also nominate chief executive officer (CEO), deputy CEO, and financial management chief. The NAC staffers will have the rights for getting signature. The next phase of the second stage will see restructuring of the NAC but the proposal is silent about the kind of restructuring. It has talked about local management in the third stage. Relation with other international airline companies will be expanded as per the commercial plan for 2020 under that.
The subsidiary company of German national flag carrier—Lufthansa Airlines—has been working with over a dozen airline companies across the world.
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