Council of Minister revise policy regarding issuing int’l flight approval license to domestic airline

Government has revised the rule regarding issuing international flight license to domestic airlines. Recent meeting of council of minister has passed the new procedure for international flight operation from domestic airline. With the change in international flight rules by the government, airlines companies of Nepal willing to operate international flight is expected to increase.

The existing rule requires 5 years of domestic flying experience and at least three aircraft in the fleet to gain the international flight permissions. The new policy will enable domestic airlines to receive a license to conduct international flights without requiring any other specifications if it has experience of conducting flight for a minimum of 5 years as stated by Culture, Tourism and Civil Aviation Ministry (MoCTCA).

According to the new policy, for time-being 3 companies; 2 passenger flight and a cargo flight service operator can be added from open competition. According to the procedure, interested companies can freely apply for the flight operation among which 3 will be elected. All 3 companies must operate schedule flights within 3 year after receiving the permission.

Currently, billions of trading is conducted in Nepal’s Air service sector among which international carrier occupies around 90% which has been creating capital deficiency and loss of the country.

At present only Nepal Airlines, Himalaya Airlines and Buddha Air conduct international flight whereas around 30 international airlines companies operate to Nepal. BB Airways is not operating international flight as it has not acquired international air operating license. Shree airlines have also approached to get international air operating license from MoCTCA.

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The new revised rule and procedure has targeted to increase the share of Nepali carriers to 60% in international flight.

The new rules will allow any airline to operate international flight after satisfying the requirement of a minimum paid-up capital depending on the type of license. Categories A, B and C type license are divided in which Class A licenses have been set for airlines whose flights last longer than three hours, Class B for flights lasting three hours, and Class C for those operating flights of less than three hours.

The category also divides airline according to type of aircraft and its weight like Class A license can be issued for wide-body aircraft like the Airbus A330 and Boeing 777, Class B license for narrow body jets like the A320 and Boeing 757, and Class C license can be issued for aircraft like the ATR, CRJ and other small planes.

Applicants for a Class A license for wide-body operations would be required to have at least NPR1.5 billion rupee (USD13.9 million) of paid-up capital. For airlines seeking a Class B license for narrow-body services, the amount would be NPR1 billion rupees, while Class C applicants seeking to deploy regional jets or turboprops on international routes would need to pay up at least NPR500 million rupees. Airlines seeking a Class C license would also still need to have a minimum of three aircraft in their fleet and add an extra NPR100 million rupee of paid-up capital per every aircraft above this number.

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