Government increases paid-up capital amount for airlines


6th Aug, 2018 | Tourism Mail Crew


KATHMANDU, Aug 06: The government has increased the paid-up capital required of airline companies. The government has divided airlines into 3 categories which will now require paid-up capital from 500 million to 1 billion rupees.
The categories have been defined according to the take-off weight of the aircraft owned by any airline. Large aircraft weighing more than 125 tons have been listed in Category A, aircraft between 40 and 125 tons are listed in Category B, and aircraft weighing less than 40 tons are listed in Category C.
According to the Secretary of the Ministry of Culture, Tourism, and Civil Aviation, Krishna Prasad Devkota, airlines in the 'A' category will require a capital of 1 billion to gain the operation license, category 'B' will require a capital of Rs. 750 million, while category 'C' will require paid-up capital of Rs. 500 million. "This will help better organize the aviation sector and discourage the practice of gaining the license without offering proper service," said Devkota.
The new arrangement was decided upon by the Economic and Infrastructure Committee of the Ministers' Council as it amended the protocol related to the licensing of organizations related to civil aviation on the urging of the Aviation Ministry. The new procedure dictates that an airline company must now have a minimum of 3 aircraft. The addition of any new aircraft will have to be followed with an increase in paid-up capital of Rs. 100 million per aircraft. Similarly, the deposit amount for gaining the aviation license has been increased from Rs. 5 million to Rs. 7.5 million. This amount will be returned 6 months after the airline company starts operation after filling the required paperwork.
The new protocol had determined a system of open competition for domestic airlines which have been operating for 5 years wanting to acquire international flight license. Similarly, the fees for operating regular flights have also been changed, according to which airplane flights require a fee of Rs. 5 million, cargo flights 3 million, and helicopter flights require a fee of 2 million rupees to conduct regular flights.