Nepal Airlines courting Middle East carriers, could sell 51% stake

Nepal’s government could sell as much as 51 per cent of the airline to Nepalese or foreign investors and retain minority ownership.


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Nepal Airlines said it has held informal talks with a Middle East airline after the Nepalese government mandated it to find a “strategic partner,” its managing director said earlier this week.

The state-owned carrier is in the midst of a turnaround, having recently brought in two A320 narrow body aircraft and with plans to bring in two A330 wide-bodies as it phases out its sole B757. Nepal Airlines currently operates two A320-200s, one B757-200, two DHC-6-300s, one MA-60 and one Y12 on domestic Nepali, as well as regional Asian flights.

The carrier resumed flights to Dubai from Kathmandu on 18 August after a four-year hiatus and is considering more than doubling its network to 19 destinations. Nepal’s government wants the airline to bring in an outside investor to fast track the expansion plan that also includes adding at least one new aircraft a year from 2017.

“The government is quite serious,” managing director Sugat Ratna Kansakar told Gulf News following a press conference in Dubai. He told Gulf News that executives from a Middle East airline recently visited him in Kathmandu for “informal talks” about purchasing a stake. He declined to provide further details on the airline.

Nepal’s government could sell as much as 51 per cent of the airline to Nepalese or foreign investors and retain minority ownership, he added, adding that a majority foreign ownership would not change the airline’s status as Nepal’s flag carrier.

Nepal’s government believes an outside investor-led expansion would give the airline a greater share of passenger traffic, of which over 90 per cent of the market is at present controlled by foreign airlines, according to Kansakar.

The move by Nepal Airlines represents the latest state-backed carrier in South Asia after SriLankan Airlines to formally seek outside intervention. The Sri Lankan national carrier has tendered for proposals with several carriers including China’s HNA Group, Turkish Airlines, All Nippon Airways (ANA) and Garuda Indonesia.