Kathmandu, June 3:

The long-standing tussle between the national flag carrier Nepal Airlines Corporation (NAC) and the Civil Aviation Authority of Nepal (CAAN) could well be easing off.

For, the two warring bodies are reportedly in the process of signing a memorandum of understanding (MoU) regarding the ground handling charges of Tribhuvan International Airport (TIA), which has since long been a bone of contention between the two.

Senior officials at NAC confirmed an understanding had been reached to pay a designated service charge or royalty to CAAN in order to retain the whopping source of revenue at TIA.

According to the decision, CAAN would get eight per cent of the handling charges this year. It would increase to nine per cent next year and finally go up to 10 per cent the year after.

NAC’s managing director (MD) Captain K B Limbu said, while the decision regarding the royalty was taken some time back the MoU has yet to be signed.

“The document is being drafted as per the format of the International Air Transport Association (IATA) so it will take some time,” he informed.

Mohan Adhikari, general manager of TIA, which falls under CAAN’s jurisdiction, said their board had made a representation regarding the payment of a royalty and NAC had consented to it.

“However, while principally it has been agreed upon by the two parties, the exact implementation is yet to start as both are in the process of drafting the MoU,” Adhikari said.

The annual revenue from the ground handling charges at TIA, according to Nepal Airlines Corporation officials, amounts to approximately Rs 120 million. So CAAN’s share in the first year would amount to Rs 9.6 million.

Admitting it was only a small share of the major pie, Adhikari claimed something was better than nothing.

“Earlier we used to get nothing. So, something is better than nothing and its a good beginning,” he said.