KATHMANDU, March 24: The Nepal Airlines Corporation (NAC) has demanded compensation from Israel Aerospace Industries (IAI), a maintenance and repair company,  stating that the company did not honor the aircraft maintenance contract as per the agreement.

IAI failed to provide an engine on lease, which the company should have supplied immediately as per the agreement, said an NAC official, adding, “We are now installing the engine that was sent for repairs in August. Given this situation, we have no choice but to demand compensation.” The delay was partly attributed to the Public Procurement Act, which prevented NAC from switching companies mid way through a contract, resulting in the aircraft being grounded for almost four months.

The employee added that all the equipment is now ready and in the process of being connected. The state-owned NAC has sought compensation for several issues under the contract, including the failure to provide engines on time, credit loss, and additional losses incurred. NAC has also refused to pay for the engine installed on the right side of the aircraft during the grounded period.

“It appears the trade deficit is high, though a final calculation is pending. We have claimed our losses, but the exact amount of compensation is still being determined,” he stated.

The grounding of one wide-body Airbus-A330 and a narrow-body Airbus-A320 since December 1, 2023, due to engine issues, has significantly impacted NAC's scheduled flights. The problematic aircraft was sent to Israel Aerospace Industries in Israel for repairs in January.

The contract stipulates that in case of an engine problem, a replacement engine must be provided within a week. Furthermore, it mandates that engine maintenance be completed and the engine returned within 65 days.

 
• Nepal_Airlines_Corporation
 
• Israel_Aerospace_Industries