The Ministry of Culture, Tourism, and Civil Aviation is set to introduce a bill in Parliament aimed at restructuring Nepal’s aviation sector. The proposed legislation, announced by Minister Badri Pandey, seeks to divide the Civil Aviation Authority of Nepal (CAAN) into two separate entities: a regulatory body focusing on safety and compliance, and a service provider responsible for managing airport operations and air traffic services.
Currently, CAAN’s dual role as both regulator and service provider has been criticized for inefficiencies and potential conflicts of interest. The proposed reform, a response to recommendations from the International Civil Aviation Organization (ICAO), aims to address these issues and bring Nepal’s aviation sector in line with international standards.
However, the path to reform has been fraught with challenges. Despite being drafted years ago, the bill faced repeated delays due to political instability, stakeholder disagreements, and concerns over implementation costs. Critics argued that Nepal’s aviation issues were more a result of poor governance and limited resources than structural inefficiencies, further complicating consensus on the proposed changes.
International pressure, particularly from the European Union (EU), has played a significant role in reviving the reform efforts. Since 2013, the EU has banned Nepali airlines from its airspace, citing safety concerns stemming from CAAN’s dual responsibilities. A series of aviation accidents involving Nepali carriers, including crashes by Yeti Airlines, Saurya Airlines, and Air Dynasty helicopters, has further underscored the need for systemic reform.
If passed, the bill will pave the way for the creation of two distinct entities, marking a critical step toward enhancing safety standards and restoring global confidence in Nepal’s aviation industry. This move is also expected to address one of the key conditions for lifting the EU’s airspace ban on Nepali airlines, signaling a new chapter for Nepal’s aviation sector.