The Tourism Ministry has submitted a proposal to the Cabinet seeking its official endorsement of a third-country codeshare deal signed between Nepal and India two years ago without its consent. All ministries are required to obtain the Cabinet’s approval before concluding any bilateral agreement.

A codeshare agreement is an arrangement where two or more airlines share the same flight. A seat can be purchased from one airline on a flight that is actually operated by another airline under a different flight number or code.

On December 21, 2016, Nepal and India signed a memorandum of understanding in New Delhi on the cooperative marketing arrangement or third-country codeshare deal. The Nepali delegation led by Tourism Joint Secretary Suresh Acharya had signed the pact without getting the Cabinet’s go-ahead.

Immediately after the accord, India started pressurising Nepal to enforce it.

But none of the accountable ministry officials wanted to take the risk of implementing the accord, said a ministry official.

The ministry then turned to the Law and Foreign ministries for a legal remedy, but it received a cold response, he said.

According to reports, the codeshare agenda was put forward by the Indian government as Delta Air Lines and KLM Royal Dutch Airlines planned to tie up with India’s Jet Airways to operate codeshare flights linking the US and Europe with India and Nepal.

Tourism Ministry officials said that the Indian Embassy in Kathmandu had written to the ministry on different occasions urging it to implement the deal.

The agreement was eventually submitted to the Cabinet for approval following

pressure from the Indian government.

Nepal and India signed a revised bilateral air service agreement (ASA) in 2010, but it does not permit codesharing. A codesharing arrangement provides travellers coordinated customer service—a single ticket and through check-in of bags to their final destinations.

The agreement is a low-risk way for airlines to expand their network without added cost.

Nepal currently has third-country codeshare agreements with China, Vietnam, Malaysia, Bhutan, the UAE and Cambodia.

Nepal has signed bilateral ASAs with 38 countries since 1963. This provides 5.7 million seats per annum to and from Nepal. However, less than 40 percent of this capacity is being utilised. Presently, 30 international airlines are operating flights from Kathmandu to 22 cities in Asia and Europe.