KATHMANDU, May 3: Private domestic airlines operating in Nepal have warned that rising aviation fuel prices are pushing them toward a situation where they may be forced to suspend services.
The Airlines Operators Association of Nepal (AOAN) said in a letter to Minister of Culture, Tourism and Civil Aviation Khadkaraj Paudel that immediate relief and policy support are needed to ease the financial pressure on airlines.
The AOAN said that global events — including the COVID-19 pandemic, the Gen-Z protests of September 8 and 9, and ongoing conflicts in West Asia — have contributed to a sharp rise in aviation fuel prices.
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It added that the increase in fuel costs has significantly raised operating expenses, while also contributing to a decline in tourist arrivals to Nepal.
According to the AOAN, fuel and operational costs now account for 55 to 60 percent of total airline expenses, putting companies under severe financial strain and reducing business volume.
The airlines have urged the Civil Aviation Authority of Nepal (CAAN) to provide a 50 percent discount on various fees, including landing, parking, navigation, and housing charges, given the difficult economic situation.
They have also requested revisions to airport service charge regulations to reduce rates, and called for airlines to be treated as special industries eligible for a 20 percent income tax exemption under the Income Tax Act.
In addition, the AOAN has demanded that fees currently collected in US dollars be converted and fixed in Nepali rupees instead.
Airlines have warned that without immediate intervention, continued cost pressures could lead to further operational difficulties and potential service disruptions.
