Proposed Legal Framework in Nepal to Compensate Passengers for Flight Delays
Photo credit, RSS
If the government approves the draft legislation submitted to parliament, passengers will be entitled to compensation from airlines for domestic flights, similar to international flights.
The bill, registered in the National Assembly, contains provisions to increase air passenger insurance and to mandate compensation to passengers for flight delays caused by airlines.
According to the bill, in the event of a fatal domestic air accident, the airline company must provide a lump sum compensation of 100,000 US dollars (equivalent to approximately 15 million Nepalese rupees) to the victim’s family. Currently, the compensation limit is only 20,000 US dollars.
The proposed law also specifies that the insurance must cover third parties outside the aircraft affected by the air incident. However, it explicitly states that passengers who stow away onboard will not be covered by this insurance policy.
Under What Conditions Is Compensation Provided?
For the first time in Nepal, the legislation proposes that airlines must compensate passengers when flights are delayed due to airline faults, or when passengers suffer injuries or damage to their belongings.
Jay Narayan Acharya, spokesperson for the Ministry of Culture, Tourism and Civil Aviation, explained that the proposed legislation aims to hold airlines and governmental bodies accountable in protecting passengers’ rights.
“If the flight is delayed for any reason, passengers must be informed in advance. If not, compensation should be provided based on the duration and circumstances of the delay,” said Acharya.
The bill mandates that airlines must notify passengers at least three hours prior to a flight cancellation, delay, or suspension, and provide compensation if the flight does not operate as scheduled.
Photo credit, BBC/Prakash Ghimire
However, Subash Sapkota, Vice President of the Airline Operators Association, remarked that most flight disruptions in Nepal are due to weather and air traffic control issues, not airline faults.
The bill also stipulates that airlines must compensate passengers for lost, damaged, or destroyed baggage or cargo.
Moreover, the bill grants the Director General of the Civil Aviation Authority the power to impose fines ranging from 10,000 to 100,000 Nepalese rupees based on the severity of violations.
If compensation is not paid or the airline fails to secure insurance, fines ranging from one million to 2.5 million Nepalese rupees will be imposed on the airline, as per the bill.
Could Increased Insurance Coverage Lead to Higher Airfares?
Photo credit, BBC/AshokDahal
Sapkota, also CEO of Yeti Airlines, confirmed that airline operators support the provisions proposed in the government’s draft law.
He estimates that with increased insurance coverage and additional liabilities, the insurance cost per airplane seat could rise to about 500 US dollars.
“The annual insurance cost for a 70-seat aircraft could increase up to 35,000 US dollars,” he stated. This new arrangement could raise an airplane’s annual expenses by approximately 5.2 million Nepalese rupees.
Distributing this cost across passengers might elevate the per-passenger airfare by around 40 to 50 Nepalese rupees initially.
“It’s a modest increase and tends to raise indirect rather than direct costs,” he added.
Nonetheless, airline operators have not clearly specified how much airfares will rise due to increased operational costs arising from these changes.
Currently, Nepalese airline tickets only display government taxes. However, once the law is implemented, airlines will be required to transparently disclose fares, airport service charges, and other applicable government fees.
When Is Compensation Not Provided?
Photo credit, BBC/Prakash Ghimire
The bill identifies three primary scenarios where compensation for delays is not applicable.
First, adverse weather or natural disasters causing disruptions. Second, delays due to airport operations or air traffic control issues. Third, instances where security authorities or the flight permission authority have prohibited departure for safety reasons. In these cases, airlines are exempt from providing compensation for delays.
Regarding who will verify the cause of flight delays, ministry spokesperson Acharya stated, “The Civil Aviation Authority and its Director General have the authority to hear complaints and impose fines. If the issue remains unresolved, the ministry will intervene.”
Airlines may not be obligated to compensate if injury or disability arises from passenger negligence.
Similarly, compensation will not be granted if injury or death results from pre-existing serious illnesses.
What Was the Previous Practice Regarding Compensation?
Photo credit, BBC/Ashok Dahal
According to Subash Sapkota, Vice President of the Airline Operators Association, previously airlines compensated for passenger baggage damages on an agreement basis, without a legal framework.
This bill introduces the first legal proposal to provide compensation for delays. It also mandates that passengers must collect their luggage within three days; failure to do so counts as delayed baggage.
If the baggage remains unclaimed even after 15 days past the stipulated period, it is presumed lost cargo, and compensation must be provided to the shipper or recipient.
When Will It Take Effect?
The bill currently registered in the National Assembly is a proposed law.
It must be passed by both houses of Nepal’s federal parliament — the National Assembly and the House of Representatives.
Once approved by parliament, the Speaker will certify and forward it to the President for final approval.
Typically, the law does not go into effect immediately upon presidential certification after parliamentary approval.
The bill clarifies that it will come into force 31 days after presidential certification.
According to statistics from Tribhuvan International Airport, nearly 150,000 people travel by domestic air monthly within Nepal.
This law is expected to further safeguard air passenger rights and the security of their belongings.
Ministry spokesperson Acharya stated, “It will ensure passengers’ rights and make air services in Nepal more quality-oriented and risk-free.”
For video content and further information, you can subscribe to our YouTube channel here. Our content is also available on Facebook, Instagram, and Twitter. Radio programs air Monday to Friday at 8:45 PM.