The government has unveiled draft bills to split Nepal's aviation authority into two separate entities—one responsible for aviation regulation and the other for airport operations and air navigation services—and invited public feedback before tabling them in Parliament.

The Balendra Shah administration, which has pledged to curb corruption, improve aviation safety and strengthen public service delivery, is expected to fast-track the long-delayed restructuring of the Civil Aviation Authority of Nepal (CAAN), according to officials at the Ministry of Culture, Tourism and Civil Aviation.

If enacted, the legislation would mark one of the biggest institutional reforms in Nepal's civil aviation sector by separating regulatory oversight from commercial and operational functions.

The two draft bills—Air Service Authority of Nepal and Civil Aviation Authority of Nepal—were published on the ministry's website on Wednesday, after the new government officially completed its first 100 days in office last week.

"After collecting public feedback, the draft bills will be sent to the finance and law ministries for their comments before being forwarded to the Cabinet," a tourism ministry official said. "Following Cabinet approval, they will be registered in Parliament."

The aviation bills form part of the government's broader legislative agenda. The government plans to introduce 151 bills in the fiscal year 2026-27, which begins in mid-July, and has directed all 18 ministries to prepare draft legislation for the winter session of Parliament.

Upon assuming office, Minister for Law, Justice and Parliamentary Affairs Sobita Gautam pledged to accelerate the legislative process. She subsequently held consultations with all ministries and prioritised the drafting of 45 bills in the first phase.

In her first stint, Gautam had been among the most vocal lawmakers advocating the immediate passage of legislation to dismantle CAAN's long-standing dual role as both aviation regulator and operator of airports and air navigation services.

The arrangement has repeatedly drawn criticism from the International Civil Aviation Organization (ICAO), which has urged Nepal to separate oversight from service delivery to eliminate conflicts of interest.

Under the proposed legislation, the Air Service Authority of Nepal would be established as a public institution responsible for operating, managing and developing airports, while providing air navigation and air traffic management services.

The new authority would also be tasked with constructing, upgrading and maintaining airports and related infrastructure, preparing long-term development plans, introducing modern technologies, promoting environmental sustainability and improving service delivery at domestic and international airports.

According to the draft bill, the service authority would be governed by a board chaired by the tourism ministry's secretary. Representatives from the finance and home ministries, along with experts from the aviation and management sectors, would serve as board members. The authority's managing director would function as its chief executive.

The second bill proposes a new Civil Aviation Authority of Nepal that would function exclusively as the country's aviation safety regulator.

The proposed regulator would be vested with broad powers to license airlines and aviation personnel, certify airports, oversee aviation training institutions and maintenance organisations, investigate safety issues and enforce national and international aviation standards.

It would also formulate and implement aviation policies, regulations and technical standards while ensuring Nepal's compliance with ICAO requirements and other international conventions.

The regulator would certify and supervise airlines, airports, aviation training institutions, maintenance organisations and other service providers. It would issue, renew, suspend and revoke licences, certificates and permits, while ensuring compliance with prescribed technical and safety standards.

The authority would also oversee the licensing of pilots, engineers, air traffic controllers, aircraft maintenance personnel and other aviation professionals. It would establish qualification standards, supervise examinations and training, and take disciplinary action against licence holders who violate aviation laws or safety requirements.

The draft bill empowers the regulator to conduct inspections, audits and surveillance of aviation operators and facilities to ensure compliance with national regulations and international obligations. Where safety deficiencies are identified, it may issue directives, impose operational restrictions or suspend licences until corrective measures are implemented.

The regulator would also investigate aviation incidents and accidents from a regulatory perspective, monitor implementation of safety recommendations and require aviation organisations to establish effective safety management systems. The bill places particular emphasis on risk-based oversight and continuous monitoring to strengthen aviation safety.

Another major responsibility assigned to the authority is aviation security. It would oversee compliance with national and international aviation security programmes, monitor airport and airline security measures, and coordinate with security agencies to safeguard passengers, aircraft and airport infrastructure against unlawful interference.

To strengthen enforcement, the regulator would be empowered to investigate violations, impose administrative penalties, recover fines and initiate legal proceedings against individuals or organisations that breach aviation laws or compromise safety. It could also immediately suspend unsafe operations if public safety is at risk.

The proposed regulator would be governed by a board chaired by the minister for culture, tourism and civil aviation, supported by technical experts. A director general would serve as its chief executive officer.

The restructuring has been under discussion for more than 15 years but has repeatedly stalled because of political reluctance, bureaucratic resistance and frequent changes of government.

Separating regulatory and operational functions is widely regarded as a crucial reform to improve transparency, accountability and compliance with global aviation standards. It is also expected to support Nepal's long-term effort to strengthen aviation safety and eventually secure removal from the European Union's air safety list, where the country has remained since December 2013 for failing to meet international safety standards.