Government’s circular to 4 airline companies for paid-up capital increment

Nepal Government has circulated four airline companies to increase their paid up capital. Ministry of Culture, Tourism and Civil Aviation (MoCTCA) has instructed National flag carrier Nepal Airlines Corporation (NAC), Himalaya Airlines, Buddha Air and Shree Airlines to escalate their paid up capital.

The circular has been forwarded as per the Ministry level decision on issuing international flight operation license in accordance to the strategy of Threshold of Regulations (TOR).

An official from MoCTCA informed that the airline companies have been instructed to increase their paid up capital as per the newly regulated working strategy. The ministry will be conducting meeting with the companies soon. The new regulations requires paid up capital of Nrs 1 Billion instead of Nrs 50 crores for acquiring international flight permissions. Above mentioned four airlines are required to increase their paid up capital.

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 Nrs 1 Billion of paid-up capital. For airlines seeking a Class B license for narrow-body services, the amount would be Nrs 75 crores, while Class C applicants seeking to deploy regional jets or turboprops on international routes would need to hold paid up capital of Nrs 50 crores.

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