Royal Nepal Airlines has slashed its international network because of falling traffic caused by an economic slowdown and a drop in tourism. The carrier is dropping all services to Europe and has arranged the early return of a leased Boeing 757.

Services to all three of Royal Nepal's European destinations - Frankfurt, London and Paris - are to be suspended from 2 October, when flights to Dubai will also be halted.

Services to Singapore were suspended on 5 August after a 757 was returned to owner China Southwest Airlines. The return of the aircraft leaves Royal Nepal with an international fleet comprising just two 757s.

The state-owned carrier admits to being in severe financial difficulty, saying: "Inbound tourism has gone down and business is not good." Further route cuts have not been ruled out.

Local media have reported that the 757 was returned early to China Southwest because of corruption allegations surrounding the lease deal, although the carrier denies this.

Royal Nepal has faced corruption allegations over aircraft deals many times before and earlier this year was forced to cancel a Boeing 767-300ER lease deal with Lauda Air.

The carrier says traffic has been falling since earlier this year, although it hopes to see a pick-up when the high season for tourism begins in October.

Many tourists have been avoiding Nepal after the killings of members of the country's royal family in June and problems with Maoist insurgents.

Source: Flight International