The government is mulling to review the existing terms of reference for domestic airlines to operate international flights in a bid to increase their market share on foreign routes.

According to the Ministry of Culture, Tourism and Civil Aviation, work is being done to relax the requirements for domestic carriers to obtain licences to operate international flights. The move was initiated after Shree Airlines applied to start international services.

Under the existing rules, domestic operators are required to have five years of domestic flying experience and three aircraft in their fleet to qualify to fly to overseas destinations.

“We are currently discussing the issue to review the terms of reference,” said Suresh Acharya, joint secretary at the ministry. As per the Cabinet decision, the terms of reference need to be reviewed every three years, he said. However, since March 2010, the government has not reviewed it, he said. The last time the government issued a licence to operate international flights was in 2011 to the now defunct BB Airways. According to the ministry’s amended civil aviation regulations, prospective international airlines need to put up a security bond of Rs5 million and have a paid-up capital of Rs500 million. The terms of reference document costs Rs50,000.

The ministry normally issues licences for three categories of international airspace: A, B and C. Class A licences have been set for airlines whose flights last longer than three hours, Class B for flights lasting three hours, and Class C for those operating flights of less than three hours.

Acharya said that Shree Airlines had applied for a Class C licence. The carrier plans to link South Asian countries, particularly India and Bangladesh. 

Shree received a no objection certificate from the Civil Aviation Authority of Nepal (Caan) in March to buy or lease aircraft, eight months after the carrier applied to begin fixed-wing operations.

It currently has three Bombardier Canadair Regional Jets (CRJs) in its fleet, and plans to add more aircraft after receiving the international flying licence. Currently, it has an international operation licence for its MI-17 helicopters only. Started in 1999, Shree has six MI-17 and four Eurocopter AS350 B3e helicopters in its fleet.

Ministry officials said that Shree planned to tap the pilgrim traffic to Kailash Manasarovar from India. The pilgrimage, known as Kailash Manasarovar Yatra, is widely popular among Indian pilgrims. Industry sources said nearly 31,000 Indians visited the sacred mountain and lake this year. The travel season starts in May and lasts till September.

Government officials said that the move to loosen requirements was designed to encourage domestic airlines to expand into international markets.

Tribhuvan International Airport (TIA) witnessed robust passenger and aircraft traffic growth in the first nine months of 2017 despite infrastructure bottlenecks. According to TIA data, 2.74 million travellers passed through the country’s only international airport as of the third quarter of 2017, up 9.59 percent year-on-year.

Aircraft movement also grew by a robust 27.54 percent to 24,249 flights. Currently 29 foreign airlines and three Nepali carriers connect Kathmandu with international destinations.