Government reviews Nepal Airlines debt interest rates to manage liabilities

Tourism Minister Khadak Raj Paudel announced the government is reviewing loan interest rates and instalment processes to address the Rs 50–56 billion debt of Nepal Airlines Corporation.

Minister for Culture, Tourism and Civil Aviation Khadak Raj Paudel informed the House of Representatives’ International Relations and Tourism Committee on Monday that consultations are underway to manage the national carrier's debt. According to OnlineKhabar English News, the government is focusing on making interest rates and instalment payment processes more practical for loans taken from the Employees’ Provident Fund and the Citizen Investment Trust.

Minister Paudel stated that he is coordinating with the prime minister and the finance minister to facilitate a solution. While the airline's liabilities are estimated between Rs 50 billion and Rs 56 billion, Paudel argued these figures are not unmanageable for an institution with the brand and assets of the national flag carrier. He noted that because the lending institutions hold public and employee savings, the government must find a balanced way out that protects those investments.

The minister suggested that easing loan restructuring and interest rates would improve the corporation's cash flow. OnlineKhabar English News reported that Paudel is considering various strategies to improve effectiveness, such as making flight schedules more scientific and potentially leasing aircraft if funds are insufficient for immediate purchases.

Although Nepal Airlines is not a profit-oriented institution, Paudel emphasized the need to make it financially capable and orderly. He told the committee that inter-ministry coordination has been stepped up to free the corporation from crisis, suggesting that modified interest rates would allow the carrier to make further progress using internal resources.