KATHMANDU, Aug 18: Private companies eyeing Air Operator´s Certificate from Civil Aviation Authority of Nepal (CAAN) will have to wait for a few months as the government is working out a new licensing provision for the domestic aviation industry.
The Ministry of Culture, Tourism and Civil Aviation, through a ministerial decision, decided to stop the process unless the new licensing provision comes into effect.
Airlines must get AOC from the government before starting commercial flights.
The tourism ministry has recently formed a committee to regulate licensing procedure of AOC for domestic airlines, including paragliding and ultralight operators. “The licensing procedure will resume only after the committee submits its report and new provision comes into effect,” said Suresh Acharya, joint-secretary at MoCTCA.
The committee has been given 45 days for the study. According to ministry officials, the AOC licensing process will resume after three months only.
As per the terms of reference, the committee will design new licensing provision after studying demand in the market.
“The committee will study to enact necessary restriction in licensing process, about operation base to increase flights frequency in rural areas and to ensure healthy competition,” he added. Acharya further said the new provision will help make aviation activities in the country organized.
Though CAAN has issued AOC to about 70 operators, only 34 are in operation. CAAN issues AOC to domestic airlines, ultralight and paragliding operators as well as other aviation sports operators.
Tourism ministry officials said the new provision will discourage the practice of holding license without operating the service. They said the new provision will tighten the licensing process by limiting the number of operators. Likewise, the committee will conduct study on economic viability for operation and human resource management among others.
As per the existing provision, any interested company can acquire AOC for domestic operation. The operator should put a security bond of Rs 1 million and have paid-up capital of Rs 150 million to get the AOC.
“The committee will propose new conditions and regulations. But the chances of royalty amount changing are slim,” Acharya added.
The six-member committee is headed by Deputy Director General of CAAN and includes members from Airlines Operators Association of Nepal (AOAN) and Flying School and Air Sports Association Nepal. The committee will submit the report with suggestions to the ministry. The ministry will finalize the new licensing provision after studying the report and the suggestions.