The government has submitted two bills to the House of Representatives that propose splitting the Civil Aviation Authority of Nepal (CAAN) into two separate entities: a regulator and a service provider. The bills, titled the Civil Aviation Authority of Nepal Bill and the Nepal Air Services Authority Bill, aim to restructure CAAN to enhance air services and infrastructure.
Tourism and Civil Aviation Minister Badri Pandey introduced the bills, emphasizing the need for the creation of the Nepal Air Services Authority to standardize and improve air services by developing modern, international-standard airports and a safe air navigation system.
If the bills are passed, the Civil Aviation Authority of Nepal (CAAN) will focus on its regulatory functions, while the Air Services Authority will be tasked with providing services related to air transport. The Minister for Tourism will chair the board of CAAN, while the Secretary of the Ministry of Tourism will head the Air Services Authority’s board of directors.
The new law also outlines the structure for leadership appointments. The Director General will lead CAAN as its executive head, appointed by the government from senior executives or Joint Secretaries within the authority. The Managing Director of the Air Services Authority, also appointed through open competition, will be a senior officer with substantial experience in civil aviation.
The bills grant the government the authority to remove both the Director General and Managing Director at any time if their performance is deemed inadequate, ensuring accountability and efficiency in the newly proposed bodies.
The proposal follows increased calls for reform after two major aircraft crashes in July and August 2022, which intensified the demand for restructuring CAAN to improve aviation safety and services. Previously, the government had attempted to divide CAAN in February 2020, with the National Assembly passing the bill in 2021, but the process stalled when the House of Representatives’ tenure ended in 2022.