Airport Sector

Nepal is a landlocked country with hilly terrain. Aviation is the second major mode of transportation after surface travel. Private sector investment was started in 1992 after the post liberalization of aviation policy. According to the data of 2013, the annual passenger movement was over 5 million and aircraft movement was 99,000.

Nepal has entered into bilateral agreement with 36 countries providing for around 5.4 million seats per annum. There are 54 airports in the country, out of which around 34 are currently operational, including International Airport at Kathmandu and 5 domestic hub airports at Biratnagar, Pokhara, Bhairawa, Nepalgunj and Dhangadhi.

There are about 18 domestic airlines giving service in the country and among them Buddha airline and Yeti Airline are the most prominent among private airlines and they cover more than 72 percent of the market share in domestic sector. Further, there are about 29 International airlines operating around 284 flights per week in Nepal. The aggregate annual International and domestic flight movements in 2013.

Nepal is a member of International Civil Aviation Organization. The Civil Aviation Authority of Nepal Act is responsible for safe, standard, regular and efficient services for operation of national and international flights, air communication, navigation and transportation. The act also provides for private sector participation in the airport sector wherein licenses be issued for operation of air service, flying school and aircraft repair facilities. Other services open for private sector participation includes; hanger facilities, repair and maintenance of aircraft, aircargo handling services.

Major stakeholders and their responsibilities

  1. The ministry of Culture, Tourism and Civil Aviation (MoCTCA): (Formulation of sector policy, multi-lateral/bi-lateral agreements, airfares and tariffs, airport and airline licensing.
  2. The Civil Aviation Authority of Nepal (CAAN): Regulate air transport and civil aviation activities, development and maintenance of airports, airline licensing and advising GoN for setting tariffs for passenger and freight.
  3. Nepal National Aviation Council: Overall development of the aviation and airline industry in Nepal.

Opportunities in Airport Sector in Nepal

Projects planned for development and up gradation of Airports in the Country

  1. Second International Airport
  2. Up-gradation of Tribhuwan International Airport
  3. Pokhara Airport
  4. Gautam Buddha Airport
  5. Operation and maintenance of existing airport

The investment opportunity for private sector is very high as there is a high demand for domestic aviation. Agencies such as IFC and Asian development Bank have strong support for the participation of private investor in this sector and Government has increased support in this sector. There are various new air route development in pipeline for the investors to make their investment fruitful.