Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: In a bid to maximize the potential of Gautam Buddha International Airport and Pokhara International Airport, the Government of Nepal is preparing to introduce a liberal aviation policy. The Ministry of Culture, Tourism, and Civil Aviation has drafted the preliminary ‘Aviation Policy 2082’ to replace the existing Aviation Policy 2063, aiming to attract more international airlines and boost passenger traffic.
The draft policy proposes granting ‘Fifth Freedom Traffic Rights’ to international airlines at these airports, allowing carriers from one country to transport passengers from Nepal to a third country. This is expected to provide more travel options, increase passenger numbers, and encourage additional flights. The ministry has prepared the draft for discussion and stakeholder consultation.
The policy emphasizes adopting an open-sky approach, fostering new bilateral and multilateral air service agreements based on reciprocity, and reviewing existing agreements. It also ensures transparent allocation of flight numbers and routes for Nepali carriers based on their capacity and service quality. The policy promotes liberal measures like ‘third-party code-sharing’ and collaboration with international entities for the operation, management, and promotion of the two airports.
Stricter Rules for Old Aircraft Imports
The draft introduces stricter regulations for importing old aircraft. The existing rule prohibiting aircraft over 15 years old remains, but new restrictions ban aircraft that have completed 50% of their ‘economic design life’ or 35,000 ‘pressurized cycles’ (down from 75% and 45,000 cycles). For non-pressurized aircraft, the 20% age limit continues. The policy also mandates establishing a permanent accident investigation mechanism.
Increased Foreign Investment Limits
The draft proposes raising the foreign investment cap in international airlines from 80% to 90%, while the 49% limit for domestic airlines remains unchanged. It also offers land at underutilized airports for investors in aircraft maintenance, flight training, aircraft manufacturing, or related fields. Investors starting flying schools will receive tax exemptions for the first three years.
New Airport Development and Private Aircraft Ownership
New airport construction will follow a co-investment model involving federal, provincial, and local governments, with approvals granted only if operational sustainability is ensured. Non-operational airports may be used for educational and recreational aviation activities. Additionally, individuals and entities will be allowed to own private aircraft for non-commercial purposes.
The policy aims to enhance Nepal’s aviation sector, boost tourism, and ensure sustainable airport operations, positioning Gautam Buddha and Pokhara airports as key regional hubs.
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