KATHMANDU, July 23: The government has extended incentive schemes for international airlines operating flights via Pokhara Regional International Airport (PRIA) and Gautam Buddha International Airport (GBIA) by another two years, amid persistently low passenger turnout.
A Cabinet meeting on Wednesday decided that the facilities will remain in place until mid-September 2028. Airlines conducting scheduled international flights from PRIA and GBIA will continue to enjoy full waivers on parking, landing, and navigation fees, along with a 50 percent discount on ground handling charges.
The earlier scheme, introduced on August 12, 2024, had exempted all fees except a 25 percent ground handling charge for three years. Under the revised scheme, airlines will now charge 50 percent on ground handling fees.
Only four airports including TIA operational nationwide due to...
In addition, Nepal Oil Corporation has been offering fuel discounts of USD 466 per kiloliter for PRIA and USD 481 per kiloliter for GBIA. According to the Civil Aviation Authority of Nepal (CAAN), airlines operating international flights from these airports can save more than Rs 700,000 per flight under the combined incentives.
PRIA was inaugurated on January 1, 2023, while GBIA began operations on May 18, 2022. Despite repeated government efforts, both airports have struggled to attract sustained international traffic, raising concerns over the viability of the multi-billion-rupee investments.
So far, five airlines — Nepal Airlines Corporation, Jazeera Airways, Flydubai, Thai AirAsia, and Qatar Airways — have operated limited flights from GBIA. Similarly, Himalaya Airlines, Sichuan Airlines, and Bhutan Airlines have conducted limited flights from PRIA.
The government has invested more than Rs 40 billion in constructing the two airports, including Rs 22 billion in loans from China and Rs 8 billion from the Asian Development Bank. For PRIA alone, CAAN is obliged to pay annual installments of around 106.56 million Chinese yuan (over Rs 2.17 billion) through the Ministry of Finance. Officials admit that insufficient international traffic has made it impossible to service the debt from airport revenues.
Recent corruption allegations surrounding PRIA’s construction have further complicated the issue. Analysts warn that Nepal’s rising public debt, coupled with the government’s inability to repay Chinese loans under the Belt and Road Initiative (BRI), has intensified fiscal challenges. Critics argue that compared to loans from other development partners, BRI loans carry higher interest rates, exacerbating Nepal’s repayment burden.
