Nepal Airlines Airbus A320 | Image: Aviation Nepal
Nepal Airlines, the flag carrier of Nepal, recently announced a tender for the wet lease of two narrowbody aircraft on a year-long lease starting July 2024. With the procurement of these two narrowbodies, the Nepalese carrier aims for network expansion and improved operational efficiency.
The state-owned airline has issued a Request for Proposals (RFP) for aircraft capable of accommodating a minimum of 150 passengers in economy class and equipped to provide hot meal services.
Nepal Airlines insisted that the aircraft should be able to commit to a minimum monthly utilization of 310 block hours. However, based on the projected schedule, the airline anticipates an average monthly utilization of nearly 364 hours.
The Nepalese flag carrier reportedly suggests an estimated payment of around USD 3,000 per block hour. Before initiating the tender process, Nepal Airlines had discussions with GoAir and Japan Airlines. The contract duration is one year, with the possibility of extension. Interested parties must submit their proposals by March 22, 2024.
Why the Narrowbody Focus?
Narrowbody aircraft, typically around 150 passengers, are ideal for short- and medium-haul routes. Given Nepal’s geographical location and potential for regional tourism, these planes align well with the airline’s existing network and expansion plans.
These two narrow-body aircraft will be stationed in Kathmandu. They will primarily operate international routes, including daily flights to Kuala Lumpur International and thrice-weekly flights to Bangalore, Hong Kong, Bangkok, and Doha.
Objectives for Nepal Airlines
Network Expansion: The additional aircraft could empower Nepal Airlines to launch new routes alongside increasing frequencies on existing ones, catering to growing international travel demand. This aligns with its 10-year business plan under Executive Chairman Ubaraj Adhikari and with government committee recommendations.
Increased Capacity: Existing wide-body aircraft (two Airbus A330s) will focus on flights to Japan, Sydney, and South Korea, while the leased narrowbodies handle growing demand elsewhere. This indicates a strategic shift towards regional routes with high tourist potential.
Fleet Optimization: Leasing offers a temporary solution while the airline evaluates long-term fleet acquisition strategies. It allows them to test demand for new routes or adjust capacity without committing to permanent purchases.
Cost Efficiency: Wet leases may provide a more cost-effective option than buying new aircraft, especially in the short term. This is crucial for an airline recovering from the pandemic’s impact and financial crisis.
Challenges and Considerations
Competition: Attracting competitive bids and selecting the right lessor is crucial for securing a cost-effective and reliable solution.
Integration: Seamless integration of the leased aircraft and crew into existing operations requires careful planning and training to ensure smooth service.
Long-Term Strategy: While leasing offers flexibility, it’s important to have a clear long-term vision for fleet management and aircraft acquisition to avoid dependence on rentals.
Nepal Airlines’ narrowbody lease tender signifies a strategic move towards network expansion and potential cost optimization. As the airline navigates the post-pandemic landscape, the success of this initiative will hinge on careful selection, smooth integration, and a well-defined long-term strategy.
Nepal Airlines operates an in-house fleet of two Airbus A330-200s, two A320-200s, and two DHC-6-300s.
