Nepal’s aviation authority has set an ultimatum for seven now-defunct airlines to settle their Rs 91.7 million (£570,000) debt. Should they fail to pay, their operators will be barred from aviation.

One week ultimatum for unsettled debts

Yesterday, the Civil Aviation Authority of Nepal (CAAN) released a public notice calling on Nepalese carriers to fulfil their unpaid taxes. The airlines involved are Necon Air, Shivani Air, Gorkha Air, Mountain Air, Cosmic Air, Skyline Airways and Air Kasthmandap. All of the airlines are now non-operational, some of them for almost two decades. The total amount in arrears is currently at 91.7 million Nepalese rupees, or just over £570,000.

Civil Aviation Authority of Nepal sign
After 2 years of nagging, the CAAN is putting its foot down | © investopaper.com

The CAAN has said that they will blacklist the former operators of the airlines from flying “as per Rule 30 (3) of the Airport Service Fee Rules 2010” if the debts are not repaid by this Sunday. This is the third public notice that the CAAN has issued regarding the debts, the other two being in 2020 and 2021. The CAAN also has the authority to confiscate other owned businesses or properties to recoup the debt, but it is yet unclear whether they intend to utilise this power.

Who are the airlines involved?

The airlines being asked to cough up are:

Mountain Air began in 2000, flying two jets leased from Raytheon. The company defaulted on its leasing contract in 2002, and the aircraft were repossessed.

Skyline Airways flew two Twin Otters between a range of rural destinations and ceased operations in 2003. Both planes were involved in crashes during the airline’s five-year run.

Necon Air was Nepal’s first private airline and ran for almost ten years. They suspended operations in 2003 over unpaid debts to banks, oil companies, and of course, the CAAN.

Gorkha Airlines was a small airline operating domestic routes and mountain flights in the Himalayas. They ceased operations in 2008 but then received appr0val from the CAAN to reopen the airline in 2017. Since then, however, the airline has failed to resume business.

Cosmic air was one of the three largest privately operated airlines in Nepal but folded in 2008, partly due to a price war with its two competitors, Yeti Airlines and Buddha Air. The CAAN revoked their Air operator’s certificate in 2010

Air Kasthmandap operated between 2009 and 2017 when the CAAN revoked its licence.

Shivani Air was a small flight school based in Chitwan Bharatpur.

Do you think the CAAN will be able to recover the unpaid debts? Let us know in the comments below!

 

10 Shares:
You May Also Like