Simrik Air leases entire fleet of Agni Air
Simrik Airlines from today officially started operations to Lukla with 17-seater Dornier 228 aircraft leased from Agni Air as it has leased the entire fleet of five aircraft from the debt ridden Agni Air.
“Simrik Airlines leased five aircraft of Agni Air after signing a tripartite five-year lease agreement between Agni Air, Simrik Airlines and a consortium of banks led by Grand Bank Nepal,” said executive director of Simrik Airlines Captain Rameshwor Thapa, without giving any details of the lease agreement.
The initiative might help Agni Air revive and prevent it from complete collapse as Simrik Airlines is now liable to repay loans worth Rs 570 million with interest borrowed by Agni Air from Grand Bank. Simrik will also have to repay loans of Rs 150 million to Rs 200 million acquired under consortium financing from two other financial institutions.
According to the agreement, Simrik Air will have to share the profit earned through the operation of the leased aircraft with Agni Air that had started for looking potential buyers after it suffered from worsening financial health due to huge bank loans and staff payment dues.
Grand Bank, along with Sunrise Bank and International Leasing and Finance Company, had financed Agni Air but the airlines failed to repay loans worth more than Rs 600 million to the banks due to the airlines key promoter Sudhir Basnet’s huge real estate exposure.
Simrik Airlines will operate Agni’s another Dornier aircraft after three months and in next three months, the company plans to operate all the three remaining Jet Stream aircraft, according to the agreement that stated that once the lease agreement expires, the aircraft will be returned to Agni Air.Though the aviation market has high demand of aircraft, the domestic airlines have not been able to fulfill it,” said chief executive of Grand Bank Sudhir Babu Khatri. He hoped that the lease agreement will create a win-win situation for both the banks and the airlines.
Agni Air had started operations in 2006 with three Jet Stream and two Dornier aircraft, whereas Simrik Airlines had started regular flights with Beechcraft 1900 in February 2013.
At present, Simrik operates flights on Pokhara, Bhairahawa, and Simara routes and with today leased Dornier 228 aircraft it has extended flights on Lukla route, whereas Agni grounded all its aircraft after its failure to pay bank loan