Bills to split Nepal's aviation regulator stall weeks before an EU deadline
The government wants off the EU air safety list by January 2027, but the two bills separating the regulator from the airport operator reached parliament only hours before it was prorogued.
Nepal has been on the European Union's air safety list since December 2013, which bars Nepali-certified airlines from flying to Europe. The government has promised to get off it by mid-January 2027. The central reform behind that promise, splitting the Civil Aviation Authority of Nepal (CAAN) into a regulator and a separate operator, is now stuck in parliament, The Kathmandu Post reported on 4 October.
One body, two jobs
CAAN both regulates aviation safety and runs the airports and air navigation services it oversees. International bodies, including the International Civil Aviation Organization (ICAO), have long criticised that arrangement as a conflict of interest. The separation was first announced in the Three Year Interim Plan of 2007/08 to 2009/10 and has been discussed for nearly two decades, according to the Post.
The two bills would create an Air Service Authority of Nepal to operate airports and provide air navigation services, and a reconstituted Civil Aviation Authority of Nepal to regulate. Under the drafts, the tourism minister would chair the regulator, while the service authority would have a government-appointed expert as chair and a managing director chosen by open competition, the Post reported.
Finance Minister Swarnim Wagle set the mid-January 2027 target in his budget speech in May, when he said CAAN would be unbundled within the year, Himal Press reported. Minister Khadak Raj Paudel said separating the functions would address the inherent conflict of interest in the current structure, Reuters reported on 6 October. The government has the majority needed to pass the bills, according to Reuters, but implementation could take several months.
The calendar problem
The bills reached the lower house only hours before parliament was prorogued in early October, the Post reported. They cannot pass until it reconvenes in winter.
That collides with another date. ICAO is scheduled to audit Nepal in May 2027, and legal documents must be frozen six months beforehand, by November 2026, the Post reported. A CAAN official told the paper the authority planned to ask ICAO for an extension because of the delay.
The EU's own position is more nuanced than a demand for new laws. The EU ambassador, Véronique Lorenzo, said in May that the EU had never specifically demanded a legislative split but insisted on the independence of each function to avoid conflicts of interest, according to the Post. She noted that a 2023 assessment had found insufficient progress under Nepal's corrective action plan. Nepal has submitted a corrective action plan that is under EU review, Reuters reported.
Why it matters commercially
The ban keeps Nepal Airlines and private carriers out of European skies and carries a reputational cost for every Nepali airline selling to foreign tourists. Nepal has recorded 109 air crashes in its seven-decade aviation history, the Post reported, and at least 380 people have been killed in 21 crashes of planes and helicopters since 2000, according to Reuters.
The reform comes as domestic airlines are already under strain from high fuel costs, as set out in a separate report on falling passenger numbers.
The date parliament reconvenes will decide whether the bills can pass before the January target. Any response from ICAO to a request to move the May 2027 audit, and the EU's next review of its air safety list, will show whether Nepal's corrective action plan is judged sufficient without the new laws in force.
How this story was made: researched and written by The Standard’s desk with AI assistance, from the published reporting and official data credited below, and checked against those sources. Our standards.
