Nepal Airlines Corporation, long emblematic of poor management and inefficiency, has become the largest loss-making public enterprise in Nepal. 

In the fiscal year 2023/24, the national flag carrier posted a net loss of Rs 1.04 billion, according to the report–Annual Status Review of Public Enterprises–published by the Ministry of Finance.

The report reveals that 15 public enterprises were operating at a loss. Among these, five institutions—including Nepal Airlines, Nepal Water Supply Corporation, Hetauda Cement Industry, Janak Education Material Centre, and Public Service Broadcasting Nepal—accounted for a combined loss of Rs 2.31 billion. 

Read: Passengers Bear the Brunt of NAC’s Mismanagement

The poor performance of these enterprises is not limited to a single fiscal year. Nepal Airlines has been consistently running in the red and now holds an accumulated loss of Rs 16.68 billion. Public Service Broadcasting Nepal follows with Rs 2.70 billion in accumulated losses. 

Altogether, the five most loss-ridden institutions account for 63.63 percent of the total accumulated losses among all public enterprises in the country.

Read: Nepal Airlines Faces Challenges in Securing Loans to Pay its Existing Debt

Several structural and operational weaknesses have contributed to Nepal Airlines’ worsening financial health. The report identifies key issues such as difficulties in repaying loans and interest for aircraft purchases, high administrative costs, underutilization of aircraft, and weak implementation of business plans.

The financial troubles of other public institutions stem from similar inefficiencies. The Nepal Water Supply Corporation is burdened by high receivables and poor institutional coordination. The Hetauda Cement Industry suffers from underutilized production capacity and inflated overhead costs. Public Service Broadcasting Nepal is struggling to remain relevant and competitive in an evolving media environment. Similarly, the Dairy Development Corporation faces losses due to ineffective marketing, overproduction, and poor management practices.

The Ministry of Finance warns that the rising net and accumulated losses across public enterprises, largely driven by debt servicing challenges and the failure to implement commercial strategies, pose an increasing financial risk to the broader public sector.