Government tightens control on airlines and travel agencies: Excessive 20% profit on tickets prohibited
In response to widespread complaints of alleged exploitation in international airfares, Nepal’s Civil Aviation Authority (CAAN) has drafted a policy to impose stricter regulations on both domestic and foreign international airlines operating in Nepal.
CAAN, the regulatory body for Nepal’s aviation sector, raised concerns about a sudden surge in airfare prices, describing it as a form of “exploitation” targeting passengers. A draft policy aimed at curbing these practices has been discreetly shared among some tourism operators.
According to a tourism entrepreneur who reviewed the draft, the policy proposes treating ticket prices with over 20% profit margin as a violation akin to black marketeering, warranting strict penalties.
Flight reductions and rising airfares
The situation intensified after Tribhuvan International Airport began closing for 10 hours daily from November 8 for construction activities, forcing airlines to cut nearly half of their flights. Exploiting this situation, some airlines reportedly collaborated with local travel agencies to drastically hike ticket prices.
“We can regulate airlines, but no clear law exists for overseeing travel agencies. Their role in inflating fares remains a major challenge,” said a senior CAAN official. The official added that airlines, even if not directly responsible, have allowed their country managers and travel agencies to manipulate ticket prices.
This crackdown aims to regulate not only airlines but also travel agencies indirectly affected by the proposed measures.
Government demands immediate airfare transparency
The Ministry of Culture, Tourism, and Civil Aviation has directed all airlines operating on international routes to provide fare details within 24 hours. During a discussion on Wednesday, Tourism Minister Badri Pandey criticised airlines for burdening passengers with exorbitant fares despite receiving state concessions.
“We provided concessions to airlines to serve citizens, but this is now being ridiculed. The state and public responsibility have been blatantly ignored,” said Pandey, expressing dismay at what he described as profiteering by prominent business groups and airlines.
Minister Pandey reminded attendees of previous agreements with airlines to control fare hikes, which included a five-point commitment, and criticized the failure to implement these agreements. He further warned that the government would take strict action if airlines did not reassess their fare policies.
Additionally, Pandey highlighted concerns regarding Nepal Airlines Corporation and Himalaya Airlines, noting their involvement in charging excessive fares. He instructed airlines to submit pricing details of tickets sold within the last 24 hours by Thursday, 4 pm.
Artificial ticket scarcity and black market practices
CAAN Director-General Pradeep Adhikari accused airlines of creating artificial shortages and engaging in black market practices to justify inflated fares. During discussions, representatives from international airlines serving Nepal were present, and they faced criticism for failing to adhere to the five-point agreement on airfare control.
The government’s proactive measures follow discussions involving the Foreign Affairs, Labor, and Tourism Ministries, which emphasised the need for immediate action to alleviate the financial burden on travellers.
Nepal Airlines reduces airfares
Nepal Airlines Corporation (NAC) has announced discounts on airfares for its international routes, offering reductions ranging from Rs 2,500 to Rs 5,000 per ticket.
The discounted fares apply to flights to New Delhi, Mumbai, and Bangalore in India; Dubai in the UAE; Dammam in Saudi Arabia; Kuala Lumpur in Malaysia; Hong Kong; Bangkok in Thailand; and Narita in Japan.
Following directives from the Ministry of Culture, Tourism, and Civil Aviation to lower airfares, NAC implemented these discounts across all sectors.
According to NAC spokesperson Ramesh Paudel, the reductions include Rs 2,500 per ticket for flights to Delhi, Mumbai, and Bangalore, and up to Rs 5,000 for flights to Doha, Dubai, Dammam, Kuala Lumpur, Hong Kong, Bangkok, and Narita.
“The fare reductions address complaints about soaring prices due to the daily 10-hour closure of Tribhuvan International Airport,” said Paudel. He also warned of strict action against black-market practices, urging the public to report evidence of overcharging.
Additionally, under its corporate social responsibility initiative, NAC provided free round-trip tickets to 37 cancer patients and 50% discounted tickets to 33 caregivers for flights to Delhi from November 1 to 22, 2024, based on doctors’ reports and recommendations from the Nepal Cancer Relief Society.
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