CAAN formed committee to review domestic airfares

KATHMANDU, Feb 06:The Civil Aviation Authority of Nepal (CAAN) has prepared to increase the airfare. The authority has formed a committee to review domestic airfares. Along with this, the fare set seven years ago is expected to increase by 20 to 25 percent.

According to the 'Internal Air Fare Regulation Guideline 2073', the authority that determines the fare specifies three areas. According to this, the authority sets the minimum and maximum airfares for inaccessible remote (STOL) and tourist sectors sectors. The authority's proposal for 2073 in the accessible sector and 2075 in the remote region is currently being implemented.

Airline companies have repeatedly requested the authorities to increase the fares saying that the air fares have not been reviewed for a long time. The authority has now prepared for a review to increase the rent. Gyanendra Bhool, information officer of the authority, said that since the airfares determined 7 years ago are still being implemented, they will be reviewed promptly. He said that the committee has been formed and discussions have been held with the stakeholders at one stage. This committee will prepare a modality for airfare and recommend it to the Ministry of Culture, Tourism, and Civil Aviation. The committee will submit a report with recommendations to the ministry regarding the rent review within 3 months. The proposal to increase airfares will be submitted to the Cabinet and only after its approval, new fares will be determined for domestic flights.

"Since it is a technical matter, the operation data of the affiliated airlines is required for this," said Bhool, "seven years ago, the exchange rate of the American currency (dollar) and the exchange rate of the Nepalese currency, the price of aircraft parts, were different. Therefore, when there is a review, the rent will automatically increase.

According to him, the price was fixed based on Twin Otter plane in the remote areas and Jetstream and ATR-42 planes in the accessible areas. Now, since new planes have arrived, operating costs are different, so the entire price has to be paid. 'Airline companies have to earn and set their fares,' he said, 'although the minimum and maximum are determined by the authority's act/law, according to which companies set prices based on demand and supply without going above the maximum fare. According to him, the actual rental rate determined by the authority may increase by 10 to 15 percent. "However, the price of tickets purchased by passengers will increase further," he said, "because the value-added tax (VAT) has increased, and the total price of the final ticket purchased by passengers may increase by 20 to 25 percent."

Unreviewed for a long time, airlines have allowed jet-engine planes to enter domestic flights as well. Due to this, airline companies have been demanding to review airfares. Apart from the fare set by the authority, the price of air-fuel is also included in the final ticket price purchased by the passenger. Airline companies levy fuel surcharges based on their price increases.