Himal Press 
KATHMANDU: The unbundling of regulator and service-provider roles of the Civil Aviation Authority of Nepal (CAAN) has made it to the government’s policy and programs yet again.
Presenting the government’s policy and programs for fiscal year 2026/27 in parliament on Monday, President Ramchandra Paudel said the government would pursue structural reforms at the CAAN by unbundling its service-provider and regulatory functions in the next fiscal year. The announcement marks the latest in a long series of commitments to reform CAAN. However, the issue has remained unresolved for over a decade despite repeated international pressure and domestic policy pledges.
The International Civil Aviation Organization (ICAO) and the European Union (EU) have long urged Nepal to separate CAAN’s regulatory and service functions, stating that the reform is essential to avoid conflicts of interest and a prerequisite for lifting the EU’s ban on Nepali airlines. The EU placed Nepal on its Air Safety list in 2013, banning all Nepali carriers from flying into its airspace. The ban is still in place. Its aviation safety missions have repeatedly warned Nepal that the existing structure compromises effective safety oversight.
ICAO first raised concerns about CAAN’s dual responsibilities in its 2009 Universal Safety Oversight Audit report. The global aviation body raised its concerns in its 2013 and 2017 audits as well. In 2012, ICAO President Roberto Kobeh González visited Nepal and called for the separation of service-provider and regulatory roles of CAAN during his meeting with Nepali officials.
The National Planning Commission (NPC), the apex policy body of the country, has acknowledged the need for reform. The 13th Plan (2013–2016), 14th Plan (2016–2019), and 15th Plan (2019–2024) all included commitments to separate the roles in line with ICAO standards. However, the commitments have remained on paper so far.
In 2018, a parliamentary committee headed by former Prime Minister Madhav Kumar Nepal directed the government to create an autonomous agency for air traffic management and airport operations. Based on the committee’s direction, the Ministry of Culture, Tourism, and Civil Aviation registered the Nepal Air Service Authority Bill and the Civil Aviation Authority of Nepal Bill in the National Assembly in February 2020.
In 2021, the National Assembly passed both bills. However, successive governments failed to get the two crucial bills endorsed by the House of Representatives. An attempt to table the bills in June 2022 was derailed by strong opposition from CAAN’s trade unions. The protest caused the bills to lapse when the term of the House of Representatives ended in September 2022.
After the election, the new Minister for Culture, Tourism and Civil Aviation, Sudan Kirati, pushed to present the bills in parliament. However, the draft bills did not move beyond the law ministry.
In February last year, the Minister for Culture, Tourism and Civil Aviation, Badri Pandey, introduced the bills in the House of Representatives. However, the dissolution of the lower house just into its third term in September derailed efforts to split the roles of CAAN yet again.
While the issue of splitting the roles of CAAN has come into the priority of the new government, it remains to be seen whether the government, enjoying a super majority in parliament, will be able to pass the two bills from parliament and implement the much-needed aviation reform.
