Insurance policy of the 56-seater aircraft is expiring on April 25.
The national flag carrier is reluctant to renew the policy as it believes it has been charged high insurance premium compared to private airlines. NAC has been paying 4.7 percent of the total cost of the aircraft as insurance premium which amounts to Rs 250,000 per day.NAC board had earlier decided that it would return the aircraft to China and cancel order for remaining aircraft if the insurance policy was not renewed by April 15.
"We have decided to wait until Sunday as we have requested AVIC International Holding Corporation to reduce insurance premium in line with international standards," Ram Hari Sharma, spokesperson of NAC, said. "Though AVIC earlier told us that it would discuss the issue with its government, it has not responded to our proposal yet."
NAC board must take decision on insurance policy five days before the policy expires as it policy renewal takes at least five days.
According to an official at NAC, the aircraft is unlikely to be operated from April 26 as the chances of China reducing insurance premium appear slim. "If the insurance premium is not reduced, we will not renew the insurance policy. This means that the aircraft will have to be sent back and the remaining order has to be cancelled," the official said.
Officials of Ministry of Culture, Tourism and Civil Aviation (MoCTCA), NAC and AVIC had held a tripartite meeting to resolve the issue on Monday. In the meeting, officials of AVIC told NAC officials that they were free to choose insurer. "They told us that we can choose insurer which quotes low premium," Suresh Acharya, joint secretary of MoCTCA, said.
NAC has been facing host of issues with the MA60, including problems with landing and take-off weight, untimely delivery of spare parts, and high cost of spare parts. Both the Chinese aircraft in its fleet -- MA60 and Harbin Y12E -- have not been able to carry passengers as per their capacity.
According to NAC officials, the 56-seater MA60 can carry a maximum of 48 passengers while taking off from airports outside Kathmandu. Similarly, the aircraft is not capable of carrying additional cargo except 20 kg of baggage, including hand carry, allowed for passengers.
Similarly, the 18-seater Harbin Y12E weighs 200 kg more than what the manufacturer had specified earlier. This means it can carry only 12 to 15 passengers while taking off from airports outside Kathmandu.
"After hearing complaints from NAC officials, Chinese officials told us that they would send a team of experts from AVIC to study airports served by MA60 and Y122E and submit report to Civil Aviation Authority of Nepal (CAAN) after taking approval of Civil Aviation Administration of China," said Acharya. "AVIC has also pledged to improve delivery of spare parts."
MA60, which arrived in Kathmandu on April 27 last year, could start commercial operation only from June 25 last year due to problems in registration of the aircraft in Nepal. In less than a year of operation, the aircraft has remained grounded for about 90 days due to delay in delivery of spare parts from China.
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