Nepal Airlines revenue rises, but debt and costs keep recovery uncertain

Kathmandu, August 15, 2026 — Nepal Airlines Corporation (NAC) has recorded higher revenue in the last fiscal year, but preliminary figures show that the national flag carrier is still likely to post a deficit as debt, interest payments, maintenance costs and other operating expenses continue to weigh on its finances.

Prime Minister Balendra Shah recently pointed to what he described as signs of recovery at Nepal Airlines. In a social media post, Shah said the carrier had generated Rs 6.27 billion in revenue in four months, achieved an 86 percent occupancy rate and repaid Rs 1.06 billion in loan instalments.

However, the airline's preliminary annual figures present a more mixed picture.

NAC estimates that its revenue reached around Rs 23.40 billion in fiscal year 2025-26, while gross expenditure could total about Rs 24.40 billion. The figures would leave the corporation with a preliminary deficit of approximately Rs 1 billion.

The financial statements have not yet been finalised. Archana Khadka, corporate director and spokesperson for NAC, said the corporation was still compiling income and expenditure details from several stations. She said the preliminary figures could change, with both revenue and expenses potentially increasing after the accounts are completed.

Even on a preliminary basis, revenue is estimated to have increased by about 12.5 percent from approximately Rs 20.50 billion in the previous fiscal year. The rise indicates stronger business activity, but the airline has yet to bring its expenditure under sufficient control to translate higher income into a sustainable financial improvement.

NAC had set a much higher target in its budget for fiscal year 2025-26. It had projected revenue of Rs 37.85 billion and expenditure of Rs 37.72 billion, with a surplus of around Rs 125 million. The preliminary revenue figure is therefore significantly below the corporation's own target.

Ground handling remains a key source of revenue for the airline. NAC estimates that it earned about Rs 5.71 billion from ground-handling services in the last fiscal year, compared with approximately Rs 5.04 billion the year before.