The Tourism Ministry is at loggerheads with the Civil Aviation Authority of Nepal (Caan) over issuing and renewing licences to fly international routes.

The ministry is preparing to renew the international flying licences of now-defunct Alpine Air and BB Airways and call for applications for fresh permits from prospective operators. Domestic carrier Shree Airlines has been eyeing international operations, and has applied for a licence at the ministry.

Alpine Air, which lost its air operator’s certificate (AOC) in 2013 for failing to launch services, recently filed an application to renew its international flying licence. If the carrier succeeds in getting its flying licence renewed, it can apply to have its AOC restored. The ministry has asked Caan for its opinion as the aviation regulator is in charge of issuing the AOC. This certificate allows airlines to use their aircraft for commercial purposes. Alpine Air had obtained its international operating licence and AOC in 1998.

Likewise, BB Airways has applied to have its international flying licence renewed after buying a 30-year-old Boeing 757 from Nepal Airlines Corporation. The carrier, promoted by president of the Non-Resident Nepali Association (NRNA) Bhaban Bhatta, launched services to Kuala Lumpur in October 2012, but ceased operations after a few months.

Ministry sources said that licences for two passenger airlines and one cargo airline could be issued under the open bid system. The ministry has been mulling to review the existing terms of reference regarding domestic airlines operating international flights.

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.

However, Caan has refused to issue AOCs to defunct carriers planning to take to the skies again. It has decided not to issue new AOCs until the infrastructure bottlenecks and airspace congestion at the country’s sole international airport Tribhuvan International Airport (TIA) are addressed.

This decision will not prevent airlines from getting AOCs to operate out of Gautam Buddha International Airport in Bhairahawa. The new facility is expected to come into operation by 2019.

“Caan has already decided not to issue AOCs to new airlines to operate out of Kathmandu, and has informed the ministry accordingly,” said Rajan Pokhrel, deputy director general of Caan. “We have also discussed the issue with BB Airways.” Domestic airlines which want to go international have the option of operating out of Bhairahawa or Pokhara airports that are expected to come online by 2021, he said.

Domestic carrier Buddha Air has unveiled its plan to procure jets to operate services from Pokhara once the airport is finished. “We are not preventing domestic airlines from expanding, but safety should be accorded priority before issuing licences,” said Pokharel.

Meanwhile, several domestic airlines have been planning to increase their fleets. Strained TIA will face a big challenge in accommodating new aircraft that have been ordered in 2018. The severely congested airport has only nine parking bays.

Nepal Airlines Corporation will be taking delivery of two new Airbus A330 aircraft. Private carrier Himalaya Airlines also plans to expand its fleet this year. Recently, a study on airport capacity declaration conducted by Caan has recommended a complete halt to issuing new AOCs until the airport is expanded.

Parking space at the country’s airports has hit saturation point as airlines have been adding bigger aircraft despite infrastructure hurdles. Last year, domestic airlines acquired at least a dozen aircraft, including four Canadair Regional Jet (CRJ) aircraft, three ATR aircraft and one MA60 twin-engine turboprop.

Buddha Air added a 72-seater ATR aircraft at the beginning of the year while Nepal Airlines will be getting two Chinese-made Y12e aircraft within two weeks.

Domestic operators have ordered more aircraft this year, as demand for air travel has continued to swell.