The Nepali Tourism Ministry has submitted a proposal for new terms of reference (TOR) for domestic airlines willing to obtain a permit to operate international routes, significantly lowering the threshold for receiving such a permit, The Kathmandu Post has reported.

If approved by the full cabinet, the new rules would abolish the current requirement of five years of domestic services prior to the launch of a first international route. Carriers would also no longer be required to have a minimum of three aircraft in the fleet.

Airlines would be able to apply for an international permit directly after establishment. However, they would need to satisfy the requirement of a minimum paid-up capital depending on the type of licence. Applicants for a Class A licence for wide-body operations would be required to have at least NPR1.5 billion rupee (USD13.9 million) of paid-up capital. For airlines seeking a Class B licence for narrowbody services, the amount would be NPR1 billion rupees, while Class C applicants seeking to deploy regional jets or turboprops on international routes would need to pay up at least NPR500 million rupees.

Airlines seeking a Class C licence would also still need to have a minimum of three aircraft in their fleet and add an extra NPR100 million rupee of paid-up capital per every aircraft above this number.

Currently, licence classes depend on the length of the international route and not on the type of aircraft used to operate it.

As a result of the loosening of the rules, the Nepali government plans to grant international licences to at least two new passenger airlines and one cargo operator. The airlines would have 45 days to apply to the Civil Aviation Authority of Nepal (CAAN) for a permit following the approval of the new TOR by the cabinet.

The TOR should be reviewed after three years but have in fact not been changed since 2010. The current amendment was prompted by the application filed by Shree Airlines (N9, Kathmandu), a domestic carrier which plans to operate regional services. The carrier applied for a licence in December 2017, only half a year after commencing operations, thus falling well short of the currently required term of five years.

The CAAN last granted an international licence in 2011 to the now-defunct BB Airways (BBW, Kathmandu), which has plans to resume operations as well.