Nepal Aviation Bills Delay Puts January 2027 EU Safety List Target at Risk

A reform deadline collides with a closed Parliament

Nepal's target of separating its aviation regulator from its airport and navigation services by mid-January 2027 is under threat after two crucial bills reached the lower house of Parliament only hours before its session ended on Friday. The delay also weakens the government's planned route toward removal from the European Commission's Air Safety List, where Nepal has remained since December 2013.

Finance Minister Swarnim Wagle announced the deadline while presenting the budget on May 30. The Civil Aviation Authority of Nepal Bill and the Air Service Authority of Nepal Bill would divide an institution that currently operates aviation services while also overseeing their safety. Successive governments have promised that change, but none has completed it.

The immediate problem is parliamentary time. A tourism ministry official said the drafts had received finance ministry approval and reached the law ministry nearly two months before their late submission to Parliament. With the session prorogued, meaning formally brought to an end, officials expect substantive consideration to wait until the winter session.

A Ministry of Culture, Tourism and Civil Aviation official said the delay had undermined the budget timetable:

"Now that Parliament has been prorogued, we have to wait for the next session in winter to get the bills discussed and passed. There is no possibility for Nepal to get out of the air safety list as per the plan announced in the budget," the official said.

That assessment is a warning from an official, rather than an announced European decision. Passing Nepal's legislation and securing removal from the EU list are separate processes. Even if lawmakers approve the bills quickly in winter, the authorities would still need to establish the new institutions and demonstrate that safety oversight works in practice.

Why the May audit creates another deadline

Nepal plans to invite the International Civil Aviation Organisation to conduct a safety oversight audit in May 2027. Aviation officials say the country's legal and regulatory documents must be finalised and frozen six months beforehand, putting the preparation deadline around November 2026.

According to those officials, updated regulations, procedural guidance and assessment checklists must also be uploaded to ICAO's Online Framework four to six months before the visit. Auditors examine that documentation before arriving, so they can plan their inspection and identify the evidence they need to verify.

The freeze is therefore more than an administrative cutoff. New legislation needs implementing rules, assigned responsibilities, trained personnel and records showing that the arrangements have actually been used. A law approved shortly before an audit cannot, by itself, supply that history.

ICAO describes its Universal Safety Oversight Audit Programme as an assessment of whether a state effectively and consistently implements the critical elements of safety oversight. The programme supports compliance with international safety standards and allows continuous monitoring of national oversight obligations. It does not simply count the laws a country has passed.

A senior Civil Aviation Authority of Nepal official said the authority intends to seek an audit extension so the new legislation can be included. No revised date or approval of that request has been announced in the accounts of the delay.

There is also a sequencing problem: the proposed May 2027 audit comes after the government's January 2027 target. If Nepal expects that audit to provide evidence supporting EU removal, it cannot complete that part of the process before January. Postponing the audit might give reform more time, but would push that evidence further into the future.

What Europe requires, and what it does not

The EU restrictions prevent airlines certified in Nepal, including Nepal Airlines Corporation, from operating in European airspace. They are not a ban on all international flights to Nepal. The central issue is confidence in Nepal's ability to supervise the airlines and aviation services under its responsibility.

EU Ambassador to Nepal Véronique Lorenzo said in May that the new government had repeatedly raised the safety list in ministerial meetings. She welcomed the political attention, while distinguishing the EU's requirement for independent oversight from a demand for one particular institutional model.

Lorenzo explained the European position:

The European Union has never asked for a legislative change to split service provision from regulation," she said. "What it has insisted upon is the independence of each function to avoid conflicts of interest.

That distinction qualifies earlier expectations about the bills. In an October 21 address during an earlier reform effort, Lorenzo said passing a law to separate the functions could allow the European restriction to be removed. Her later explanation makes clear that a split is a possible route to independent oversight, not an automatic guarantee of removal.

A European assessment visit in September 2023 found discrepancies between the authority's approved organisational structure and the actual allocation of departments, sections and staff. Nepal had submitted evidence in 2022 of steps intended to strengthen functional separation within the existing authority, but the subsequent visit showed that formal arrangements and working practice did not fully match.

Nepal then prepared a corrective action plan. One account describes that plan as under EU review; Lorenzo's more recent comments focus on slow implementation. She said there had been hardly any progress during the preceding two and a half years. These describe different stages of the same process: submitting a plan does not establish that its measures have been carried out.

Nearly two decades of unfinished legislation

The proposal to separate aviation regulation from service provision dates to the government's Three Year Interim Plan for 2007-08 to 2009-10. Later policies and budgets kept the proposal alive, without completing the institutional change.

The legislative record includes passage through the upper house, repeated Cabinet submissions and renewed drafts under successive administrations. The main milestones show how long the issue has remained unresolved:

• 2007-08 to 2009-10: The Three Year Interim Plan proposed considering recommendations to reorganise the aviation authority.
• February 23, 2020: Two aviation bills were registered.
• August 2, 2021: The upper house passed the bills unanimously.
• 2022: ICAO formally called for separation of regulatory and service functions in its Nepal audit findings.
• July 16, 2023: The tourism ministry again sent drafts to the Cabinet before a planned European safety assessment.
• September 6, 2024: Tourism Minister Badri Prasad Pandey placed the bills before the Cabinet.
• May 30 budget announcement: Finance Minister Swarnim Wagle set the mid-January 2027 reform target.
• Latest parliamentary session: The bills reached the lower house shortly before prorogation.

Reports differ in how they count the attempts. One describes the current effort as the third, following attempts in 2017 and 2024. Another records the 2020 registration and 2021 upper house passage, and says the tourism ministry had sent the drafts to the Cabinet four times after that passage. Those accounts should not be treated as a single, consistent count of parliamentary introductions.

The procedural delays have continued despite political support. A Cabinet bill committee previously approved drafts after recommending wording changes, but further Cabinet approval was still required before parliamentary registration. Law Minister Sobita Gautam, appointed on March 27, prioritised drafting 45 bills, including the aviation measures. Aviation officials nevertheless blame a roughly two month stay at the law ministry for the latest delay.

How the two authorities would work

The proposed division would leave the Civil Aviation Authority of Nepal responsible for regulation and place airport operations and related services with a separate Air Service Authority. Reports use both Air Service Authority of Nepal and Nepal Air Service Authority for the proposed service institution; the latter is also described as NASA.

The regulator would issue Air Operator Certificates, the authorisations airlines need to conduct commercial operations. It would register aircraft, certify their airworthiness and license pilots, air traffic controllers and engineers. Its proposed enforcement powers include fines and suspension of airlines or aviation organisations that breach safety standards.

The service authority would construct, maintain, upgrade and operate airports, and provide air navigation and air traffic management. Its responsibilities would also include aviation communications, weather services, airport security, firefighting and search and rescue. It could collect landing, parking, navigation and passenger service charges and use airport facilities commercially.

This is the practical conflict the bills seek to address: an organisation that operates airports and navigation services also assesses whether those services meet safety requirements. Separate bodies would give the regulator a distinct organisation to inspect and, where necessary, sanction.

Tourism Minister Khadak Raj Paudel, whose name is also rendered Khadkaraj Poudel in reports, described separation as a way to address that conflict and strengthen oversight. He also said Nepal was improving industry training, pointing to the need for work beyond restructuring.

Paudel described the continuing nature of safety reform:

"Aviation safety requires continuous improvement, not a one-time structural change," he said.

Leadership rules will test independence

The proposed regulator would have the tourism minister as chairperson, with joint secretaries from the tourism and finance ministries as members. Its director general would serve as chief executive and member secretary. A government nominated aviation expert would need a postgraduate degree and at least 10 years of relevant experience.

The service authority would instead have a government appointed expert as chairperson, representatives from the tourism, finance and home ministries, and two nominated experts, including at least one woman. Its managing director would be selected through open competition, require a postgraduate degree and at least 15 years of civil aviation experience, and serve four years.

Accounts differ on the qualifications for the regulator's executive head. The detailed description accompanying the latest delay says the director general would be selected from senior government officers or employees at the authority's 12th level, with a four year term and possible reappointment. Another account describes both executive heads as requiring a master's degree, 15 years in civil aviation management and executive management experience.

Without a common published bill text establishing which provisions are current, those descriptions cannot be assumed to be identical. The distinction matters because technical qualifications, eligibility restrictions and the appointment process determine who can lead the new regulator.

The proposed recommendation committee is described as led by the relevant ministry secretary, with a ministry appointed expert and the responsible joint secretary. The framework also bars people convicted of specified crimes, including corruption, money laundering, kidnapping and offences involving moral turpitude.

Legal separation would therefore still leave the ministries with substantial appointment and governance roles. The practical test will be whether the regulator can make safety decisions independently of the service authority and withstand pressure when those decisions affect airport operations or airline activity. The European findings about organisational charts and actual staffing make that distinction especially relevant.

Airport investment and staff transfers

The service authority bill would broaden opportunities for private participation in airport construction, operation and management. With government approval, the authority could make joint investments with domestic or foreign investors under a business plan, including partnerships involving both public and private investment.

The proposed law also permits contracting out services. Government agencies could receive contracts directly, while private and nongovernment entities would have to be selected competitively. Those arrangements change who may deliver services, but do not replace the need for independent safety supervision.

Staff placement is another substantial task. Permanent employees of the existing authority would initially move to the service authority. Those wishing to join the regulator would have 60 days to apply, with placements based on seniority and performance and without reducing remuneration.

Voluntary retirement could be offered to employees who cannot or do not wish to transfer. Civil servants could be deputed if technical personnel are insufficient. Newly appointed employees would enter a contributory pension system under prevailing law.

The bill also gives authorised service officials access to private property where activity could obstruct flight operations. Ordinary entry would require notice and the presence of security personnel and a local representative. Emergencies involving accident prevention or urgent repairs would permit entry without notice, followed by a report. These operational powers illustrate how much implementation work sits behind the headline promise of two separate bodies.

The budget stakes extend beyond European routes

The aviation reform accompanies a fiscal year 2026-27 budget allocating Rs7.34 billion to culture and tourism and Rs2.93 billion to civil aviation. Of the aviation allocation, Rs1.53 billion is designated for upgrading Tribhuvan International Airport, about 52 percent of the sector's stated total.

The government also plans private participation in operating Gautam Buddha and Pokhara international airports, night flights at Bharatpur, expansion at Surkhet and runway upgrades at Talcha and Tarigaun. It intends to finalise the implementation model for Nijgadh International Airport within six months.

The tourism programme includes Nepal Wellness Year 2027 and Tourism Year 2028-29, efforts to attract visitors spending more, and incentives for investment in resorts and hotels. Mountain plans include naming unnamed peaks above 6,000 metres, improving rescue arrangements and developing the Great Himalayan Trail and Danphe Route.

Cultural projects include Rs830 million for Lumbini infrastructure and promotion of Janakpur as an international wedding destination. These plans depend on visitor confidence and reliable transport as well as promotion. Spending on airports and tourist destinations cannot substitute for credible oversight of the aviation services connecting them.

Past safety gains did not end EU restrictions

Nepal's earlier ICAO results show that progress in one international process does not automatically resolve another. Its reported effective implementation score rose from 46 percent in 2009 to 54.97 percent in 2013 and 66 percent in July 2017, a gain of 20 percentage points between 2009 and 2017.

ICAO withdrew Nepal's significant safety concern designation in 2017. The European restrictions nevertheless continued. A historical internal assessment estimating a 67 percent score was not a new ICAO audit result and should not be read as a current measure of readiness.

Audit postponements also have precedent. Nepal sought to defer the planned 2019 assessment to allow time for the institutional split. The rescheduled May 10-20, 2020 visit was postponed because of COVID-19, and another visit expected on March 21, 2021 was shelved during the pandemic.

The safety record remains serious, though the reported crash totals use different periods and scopes. The latest account cites 109 crashes across Nepal's seven decade aviation history. Another reports at least 380 deaths in 21 aircraft and helicopter crashes since 2000. A report from an earlier legislative effort counted eight crashes, six fatal, and more than 100 deaths during its preceding two and a half years. These are not interchangeable totals.

The next concrete steps are parliamentary consideration, approval and implementation of the bills, clarification of the audit timetable, and evidence of progress on the corrective action plan. No exact winter session date, replacement audit date or European removal decision has been announced in the accounts of the current delay. EU aviation safety cooperation launched in Kathmandu in June 2026 provides continuing technical engagement, but does not establish a removal deadline.

Key Points

• Late submission of two aviation bills threatens Nepal's mid-January 2027 reform target.
• A planned May 2027 ICAO audit creates a document preparation deadline around November 2026, according to aviation officials.
• Nepal intends to request an audit extension; no approved replacement date has been announced.
• The EU requires independent regulatory and service functions, not automatically a particular legislative split.
• The bills would separate safety oversight from airport operations, navigation services and infrastructure development.
• Appointments, staffing and evidence of implementation will matter alongside passage of the laws.
• Nepali airlines have remained subject to EU restrictions since December 2013.