The Government of Nepal has advanced plans to separate the Civil Aviation Authority of Nepal (CAAN) into two institutions, one responsible for aviation regulation and the other for service delivery. Following the introduction of two bills in the House of Representatives, CAAN has begun preparing draft regulations covering staff management, finances, procurement and other administrative arrangements needed for the proposed restructuring.
The development is relevant to Nepal’s aviation and tourism sectors because the proposed separation would change how civil aviation regulation and aviation services are managed. However, the bills still need to complete the legislative process, and the two institutions have not yet been established.
CAAN Begins Drafting Regulations for the Proposed Restructuring
CAAN has formed a committee coordinated by Bikram Raj Gautam, the authority’s spokesperson and director of its Transition Management Directorate, to prepare the required regulations. The initiative follows the government’s move to advance legislation separating the authority’s regulatory responsibilities from its service provision functions.
CAAN Director General Mukesh Dangol has assigned the team to work on regulatory and administrative arrangements for both proposed institutions. The regulations are intended to help prepare the two bodies for implementation if the bills are passed by Parliament and the restructuring proceeds.
Draft Rules to Cover Staff, Finances and Administration
The draft regulations will address how existing employees are allocated between the two institutions, how their benefits are maintained and how each body’s financial resources are managed. The committee is also preparing rules covering employee management, procurement, official travel allowances and financial administration.
Once the drafts are completed, they will be submitted to the CAAN Board for approval before being forwarded to the Ministry of Culture, Tourism and Civil Aviation. The ministry will then send them to the Ministry of Law and the Ministry of Finance for further review and agreement. After the necessary approvals, the regulations will be submitted to the Cabinet, and they can be implemented only after the Cabinet approves them.
Employees Seek Guarantees on Benefits and Job Security
CAAN employees previously opposed efforts to divide the authority, including protests, office demonstrations and the locking of the office of then Director General Rajan Pokharel. That earlier restructuring initiative did not progress through Parliament and eventually became inactive.
This time, employees have reportedly adopted a more restrained position as preparations continue. Their main concerns include protecting existing service benefits, ensuring job security and guaranteeing the continuation of pension benefits after retirement. These protections remain important issues as the proposed institutional changes move forward.
Two Aviation Bills Introduced in Parliament
The current initiative follows an earlier attempt in February 2025, when former tourism minister Badri Pandey introduced legislation to split CAAN. That proposal did not advance to substantive parliamentary discussion and subsequently became inactive.
On October 2, 2026, Tourism Minister Khadgaraj Paudel (Ganesh) introduced two bills in the House of Representatives, the Nepal Air Service Authority Bill, 2083 and the Nepal Civil Aviation Authority Bill, 2083. The proposed legislation would establish separate institutions for aviation service provision and civil aviation regulation. The bills must still complete the legislative process, so the separation should not be treated as an accomplished change.
