Nepal | May 29, 2020

MoCTCA proposes paid-up capital hike for airlines, reclassification of aircraft

Himalayan News Service
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Ariel view of TIA

An ariel view of domestic airlines parked at the Tribhuvan International Airport in Kathmandu, on Tuesday, September 6, 2016. Photo: RSS/ File

Kathmandu, July 29

The Ministry of Culture, Tourism and Civil Aviation (MoCTCA) has proposed an increment in paid-up capital of airline companies from existing lump-sum capital requirement of Rs 500 million for class ‘A’, ‘B’ and ‘C’ category airlines to Rs one billion, Rs 750 million, and Rs 500 million, respectively.

‘The procedure for establishment of airlines for extension of domestic international carrier for international air service operation’ submitted by MoCTCA to Cabinet has proposed to raise paid-up capital requirement of airlines and also classify aircraft based on maximum take-off weight.

The existing procedure classifies aircraft based on their flying range.

However, new procedure has proposed to classify aircraft that have maximum take-off weight of above 125,000 kg as class ‘A’; 40,000 kg to 125,000 kg as class ‘B’; and below 40,000 kg as class ‘C’. However, to operate all three categories, the airline must have at least three aircraft.

The procedure is supposed to be amended by the Cabinet every three years to make it contextual. However, it was not amended since last nine years. MoCTCA will call for applications for new licensing only after amendment, as per officials.

“MoCTCA will open the licence for both freighter aircraft and passenger aircraft only after amendment of procedures.” After amendment, MoCTCA will call for applications from interested parties to operate both categories of aircraft based on new rule.

It is reported that new parties have been approaching the ministry for licence to operate freighter aircraft company. Reportedly, the procedure also allows the domestic airline companies who have been in operation for five years to operate international flights based on their performance and capacity to operate international flights.

A version of this article appears in print on July 30, 2018 of The Himalayan Times.

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