Nepal Airlines

The 1950s and 1960s: early years

The airline was established in July 1958 as Royal Nepal Airlines Corporation with one Douglas DC-3. At the beginning, its services were limited to Simara, Pokhara, Biratnagar and Indian cities such as Patna, Calcutta and Delhi. In 1961, Pilatus Porter STOL aircraft joined the fleet, and in 1963 12-seater Chinese Feng Shou-2 Harvesters were brought into service, opening up the kingdom’s more remote routes.

Nepal's geopolitical situation produced a strange, politically mixed fleet, which was typically financed through aid programs from the country of manufacture. Seven more Douglas DC-3s were added to the fleet between 1959 and 1964. Furthermore, China supplied a couple of Feng Shou-2 aircraft which did not enter scheduled service. Bell Helicopters leased from Singapore were also used for charters. Two Russian Mi-4 helicopters also flew on scheduled routes to remote points. The route network was expanded internally and externally, soon reaching Dhaka in what was then East Pakistan.

In 1966, a turboprop Fokker F27 was added to the airline’s fleet.

The 1970s and 1980s: the jet age and economic boom

In 1970, NAC acquired its first Hawker Siddley HS-748 followed by Twin Otters in 1971 and Boeing 727s in 1972. Two Boeing 757s gradually replaced the airline’s Boeing 727s in 1987.

Nepal had 181,000 tourist visitors in 1985, of which 80 percent arrived by air. Royal Nepal Airlines carried 38 percent of these tourist passengers, but that number was down from the company's peak market share of 50 percent in 1979. Indian Airlines Corporation was NAC's main competitor, but newer entrants in the business were also competing with NAC for market share. These companies included Singapore Airlines and Lufthansa, which started direct Kathmandu-Frankfurt service in cooperation with NAC in October 1987 and now, other airlines are also wanting to do so.

At the time, Royal Nepal Airlines' network connected 38 domestic and 10 international destinations. NAC was flying directly from Nepal to Hong Kong (home to many Gurkhas employed by the British Army) by 1988 using a Boeing 757. In April 1988, NAC and the Civil Aviation Administration of China cooperated to provide scheduled service between Kathmandu and Lhasa in the autonomous province of Tibet.

RNAC reported revenues of $54.3 million in 1988—89, producing an operating profit of $17 million. With a workforce of 2,200, NAC had become the country's largest employer and largest earner of foreign currency, bringing in roughly $15 million a year from abroad. Seventy-five percent of the company's passengers were foreign tourists. London, Dubai, Dhaka, Karachi, and Bombay were added to the route network during the 1980s.

The 1990s and 2000s: corruption

The domestic air market of the country was liberalized in 1992, and new competitors emerged: Necon Air, Nepal Airways, Everest Air, Buddha Air, Yeti Airlines, and Sita Air. Nepal Airlines had its last Boeing 727 flight in 1992. By 1997, these four competitors accounted for 70 percent of Nepal's domestic air traffic.

Adding to the airline's struggles as the millennium approached, were allegations of corruption which periodically surfaced. One case involved Dinesh Dhamija, who later founded the Ebookers Internet travel site. Dhamija had been accused of receiving his post as director of RNAC's European operations in the early 1990s on account of cronyism with Prime Minister Girija Prasad Koirala. Dhamija won a substantial settlement with the airline after a bitter court battle over these charges.

In December 2000, a large scandal revolved around the lease of a Boeing 767 aircraft from Austria's Lauda Air, which entered service in over protests from employees and government officials. The latter claimed the deal was unnecessary, since NAC was not getting enough usage from its two existing Boeing 757s; further, the actual cost per flight hour of the Lauda jet ended up being $5,000 ($1,150 above the cost specified in the contract). RNAC chairman Haribhakta Shrestha was suspended during an investigation, along with other NAC executives; Nepal's tourism and civil aviation minister Tarani Dutt Chataut resigned soon after.

In 2004, it was reported that the Government of Nepal had decided to sell off 49% of its stake in Nepal Airlines, to the private sector, and hand over management control, whilst retaining a 51% share. This would provide the investment to get the airline out of significant debt.

The former chairman of Nepal Airlines, Ramagya Chaturvedi, was jailed for corruption in February 2005.

In September 2007, the airline confirmed that it had sacrificed two goats to appease a Hindu god following technical problems with one of its aircraft. Nepal Airlines said the animals were slaughtered in front of the plane, a Boeing 757, at Tribhuvan International Airport. The offering was made to Akash Bhairab, the Hindu god of sky protection, whose symbol is seen on the company’s aircraft. The airline said that after Sunday’s ceremony, the plane successfully completed a flight to Hong Kong. Raju KC, an airline official, was quoted as saying: “The snag in the plane has now been fixed and the aircraft has resumed its flights.” The company did not say what the problem was, but reports in local media had blamed an electrical fault.

In 2009, at the Dubai Airshow, Nepal Airlines signed a memorandum of understanding to acquire two Airbus A320-200. The A320s will operate flights to the Middle East and Southeast Asia.

On 30 April 2015, Nepal Airlines received its second Airbus A320, Lumbini. The aircraft was filled with 5 tonnes of aid material to be flown from the Airbus factory in Hamburg, to Nepal on delivery of the aircraft. The aid material will be used in the relief effort for the April 2015 Nepal earthquake.

In 2015, Nepal Airlines flew 253,658 travellers, up 22.87 percent compared to the previous year of 206,430 passengers. Similarly, it flew 42,535 domestic air passengers in 2015, increase of 21.60% compared to previous year.

Nepal Airlines has aimed to add 2 wide-body and 2 more narrow-body aircraft by 2017.

Destinations

Nepal airlines flies to 8 international destinations from its base Tribhuvan International Airport in Kathmandu. Nepal Airlines flies to 25 domestic destinations.

Nepal Airlines is included in the list of air carriers banned in the EU, as of December 2015.

Codeshare Agreements

Fleet

The Nepal Airlines fleet includes the following aircraft (as of January 2017):

Incidents and accidents