Nepal’s Aviation Reform Takes Flight: CAAN Split Bill Nears Passage, Promising Enhanced Safety And Global Connectivity

30th July 2025 Kathmandu

Nepal’s skies are on the cusp of a significant transformation as the government moves closer to the long-anticipated institutional separation of the Civil Aviation Authority of Nepal (CAAN).

Bill to Divide CAAN

A landmark bill, the Nepal Aviation Service Authority Bill, 2081, is now poised for passage in the current session of the Federal Parliament, marking a pivotal moment in the nation’s aviation sector reform. This crucial development aims to align Nepal’s regulatory practices with stringent international aviation standards, a move expected to bolster safety, improve governance, and unlock new opportunities for global connectivity.

Political Will and Legislative Momentum Drive Aviation Restructuring

The legislative wheels are turning swiftly, with Rajkishor Yadav, Chairperson of the Parliamentary Committee on International Relations and Tourism, confirming that the process to split CAAN into two distinct entities is nearing completion. Yadav expressed strong confidence that the Nepal Aviation Service Authority Bill, 2081, will secure parliamentary approval during the ongoing session. He underscored the robust political commitment to this initiative, noting its inclusion in the government’s annual policy and program document, which signals a clear intent to move forward without delay.

This commitment was evident during an extensive committeelevel discussion held within the House of Representatives. The meeting saw the active participation of Minister for Culture, Tourism, and Civil Aviation Badri Prasad Pandey, alongside several influential lawmakers who have submitted proposed amendments to the bill. MPs like Madhav Sapkota, Shishir Khanal, Nisha Dangi, Manish Jha, and Rajendra Bajgain contributed their valuable insights, working collaboratively to refine the legislation. Their collective aim is to ensure the creation of an aviation framework that guarantees both regulatory efficiency and operational autonomy.

Addressing a LongStanding Conflict of Interest: The Core of the Reform

At the very heart of the proposed bill lies the functional separation of regulatory and operational responsibilities within Nepal’s civil aviation landscape. This has been a critical point of contention for years. Currently, CAAN shoulders a dual burden: it oversees safety regulations while simultaneously managing airport operations and air traffic services. This inherent conflict of interest has drawn consistent criticism from major international aviation bodies, most notably the International Civil Aviation Organization (ICAO). ICAO has repeatedly urged Nepal to unbundle these functions to ensure more effective oversight and enhance compliance with global best practices.

Once enacted, the legislation will pave the way for the establishment of two independent bodies:

• One entity will be solely responsible for regulatory oversight and safety compliance.
  The other will manage airport and air traffic operations.
• This strategic division is expected to decisively resolve longstanding conflicts of interest, significantly improve overall governance, and strengthen Nepal’s credibility in international aviation forums.

Paving the Way for Removal from the EU Air Safety Blacklist

The restructuring of CAAN is widely regarded as a crucial step in Nepal’s determined efforts to be removed from the European Union’s air safety blacklist. This blacklist, imposed in 2013, has severely hampered Nepali airlines, barring them from operating in EU airspace due to persistent concerns over aviation safety oversight. Separating CAAN’s regulatory and operational functions is a core recommendation from both the EU and ICAO, seen as indispensable for enhancing institutional clarity, promoting greater accountability, and ultimately, improving air safety standards.

Addressing Implementation Concerns and Ensuring a Smooth Transition

While there is broad support for the restructuring, some stakeholders, including certain Members of Parliament, have voiced legitimate concerns regarding the practicalities of the transition process. Key areas of discussion include human resource management during the split and ensuring the financial sustainability of the newly formed entities.

Minister Pandey has provided assurances to the parliamentary committee that the government is fully cognizant of these challenges and has already initiated preparatory work for a smooth transition. He affirmed that comprehensive frameworks will be developed to effectively address any logistical and legal complexities that may arise during the restructuring phase. “The bill is a priority not only for aligning with international standards but also for strengthening the aviation sector as a driver of tourism and economic growth,” Pandey emphasized during the session, highlighting the broader economic benefits of this reform.

A New Era for Nepal’s Skies: Enhanced Safety and Global Connectivity

In conclusion, the swift and determined progress on the Nepal Aviation Service Authority Bill signals a monumental reform in Nepal’s civil aviation administration. If the bill passes in the current parliamentary session as anticipated, it will usher in a new regulatory era for Nepal’s skies. This fundamental shift is expected to bring Nepal significantly closer to achieving full international compliance, drastically enhancing aviation safety, and crucially, paving the way for expanded global connectivity for Nepali airlines and the nation as a whole. The journey towards a safer, more efficient, and globally integrated aviation sector in Nepal is now well underway.

For More: Bill to Divide CAAN