CAAN revokes license of seven domestic airline companies

An aircraft that belong to Agni Air at Tribhuvan International Airport in Kathmandu. Photo: File photo
An aircraft that belong to Agni Air at Tribhuvan International Airport in Kathmandu. Photo: File photo

KATHMANDU, Nepal- Civil Aviation Authority of Nepal, the government body that regulates airline operators in the country has said that it would revoke the operating licenses of seven domestic airlines companies if they failed to meet the minimum requirements practiced internationally.

The CAAN has opted for this stern action to avert action from the International Civil Aviation Organization, a United Nations body that sets aviation safety and security standards.

After the UN agency that promotes safe and orderly development of international civil aviation throughout the world said the practice of issuing Air Operator Certificates (AOCs) in Nepal was haphazard, which was making Nepal’s air transport sector prone to accidents, the CAAN had cancelled AOCs of leading airline operators including Agni Air, Namaste Air, Swift Air, Blue Air, Muktinath Airlines, Alpine Air and BB Airways earlier in July.

As per the existing law, to receive an Air Operator Certificate, a domestic airline company must pledge a security deposit of Rs 5 million, while those operating international flights should park security deposit of Rs 50 million. The company must also have a minimum paid up capital of Rs 150 million and airline companies must start operation within two years of getting the licence. In case the airline fails to start the operations, CAAN can scrap the license. According to the revised AOC guideline, airline companies will get AOCs only after they acquire planes. However according to old regulation, airline companies were required to purchase aircraft within six months of getting the AOC—a provision that was widely misused by many companies.

Though the Ministry of Culture, Tourism and Civil Aviation is not in a favour of the revocation of certificates and had said the move was against the law, the CAAN has been stuck to its decision in a fear that the UN agency may recommend international travellers visiting Nepal to avoid using flights operated by domestic airlines.

A MoCTCA source revealed that, not only the ICAO but the European Commission has also been closely watching Nepal’s aviation sector since February 2012 after number of air accidents started going up in the country. EC had expressed concern to CAAN and representatives of Sita Air that visited Brussels earlier about growing number of accidents and had asked Nepal to improve its safety standards. Following this, an ICAO had concluded that Nepal’s domestic aviation sector was facing safety related problems because of haphazard practice of issuing AOCs.


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