The Royal Nepal Airlines (RNAC) is looking towards taking loans amounting to RS 220 million from the Nepal Bank Limited and the Himalayan Bank Limited to clear its debt to the China Southwest Airlines.

The RNAC management decided to take the loan after the China Southwest Airlines warned that it would file a lawsuit to recover US$ five million in dues.

The China South West Airlines has fixed the end of January 2003 as the deadline for the clearance of the dues.

According to the RNAC management, the national flag carrier has used its Boeing jet as collateral to receive the loans.

Meanwhile, the national flag carrier has decided to cut the number of its weekly flights to Dubai in order to minimize the financial burden, which it has been facing of late.

The number of flights will be curtailed from the existing three flights to two flights per week. The changed flight schedule will come into effect from September 16.