Two Bills, One Aviation Test

Nepal has spent the past few years expanding the physical boundaries of its aviation system. Gautam Buddha International Airport opened in 2022, followed by Pokhara International Airport in 2023. Yet between January and November 2025, 4,098,549 of Nepal’s 4,111,981 international passengers still passed through Tribhuvan International Airport—99.67 per cent.

Nepal has become better at adding aviation capacity than converting that capacity into connectivity. Now the country is attempting an equally consequential change to the institutions governing it.

On 2 October, the government registered the Nepal Civil Aviation Authority Bill, 2083 and the Nepal Air Service Authority Bill, 2083 in the House of Representatives. The legislation would end CAAN’s present combination of regulator and service provider. The proposed Civil Aviation Authority would handle certification, licensing, aircraft registration, standard-setting and safety oversight. A separate Air Service Authority would take airport infrastructure, commercial services, air navigation and associated technical functions.

Earlier versions 

This is not Nepal’s first attempt. Earlier versions reached clause-by-clause consideration before becoming inactive following the dissolution of the House in 2082 BS. CAAN’s overlapping regulatory and service-provider roles have been raised through ICAO oversight audits going back to 2009. The bills address a structural question Nepal has carried for over a decade. CAAN has already created internal functional separation through its regulatory directorate. Legal separation goes further, removing the conflict created when regulator and infrastructure operator sit within the same institution. But separation alone does not guarantee an effective regulator.

ICAO’s April 2022 audit illustrates why. 

Nepal achieved an overall Effective Implementation score of 70.10 per cent, but performance varied sharply. Airworthiness stood at 83.65 per cent and aircraft operations at 82.20 per cent, while civil aviation organisation was 45.45 per cent and aircraft accident and incident investigation just 21.69 per cent. State system and functions scored 46.67 per cent, while resolution of safety issues stood at 42.86 per cent. The harder part of reform is therefore not writing another set of rules. It is building enough technical capability to identify deficiencies, investigate them properly, enforce corrective action and follow them through.