Two Nepali companies have joined hands with a Chinese air service operator to set up a new international airline, the biggest ever foreign investment in the aviation sector of Nepal.

Himalayan Infrastructure Fund ( HIF) Aviation Investment and Yeti World Investment has signed an agreement with Chinese air service operator ‘Tibet Airlines’ for investment in Himalayan Airlines, which was formerly known as Yeti Air International.

The Nepali companies will have 51 per cent stake while Tibet Airlines will have 49 per cent in the airlines, which will have initial investment of US$25 million.

The Himalayan Airlines’ maiden flight is scheduled to commence on Kathmandu-Lhasa route from October 28, Cheng Yiru, chairman of Tibet Airlines, said.

In the first year, the airline plans to start service with at least three Airbus 320 series aircraft and will increase the fleet to five aircraft in the second year, and connect Kathmandu-Chengdu immediately after Lhasa, the chairman of Tibet Airlines said.

Chinese Ambassador to Nepal Wu Chuntai said the joint venture agreement marks the business-to-business cooperation between Nepal and China and would further strengthen economic ties between the two countries. He said Tibetan Airlines investment is the biggest ever foreign investment in the aviation sector of Nepal.