Nepal is preparing to split its aviation regulator in two, a restructuring the government presents as the centerpiece of its effort to improve air safety in a country with one of the region's most challenging operating environments.

The plan would break up the current authority, which today combines safety oversight with the operation of air navigation services and airports — a dual mandate that international safety bodies have long flagged as a structural conflict of interest. Under the proposal, one body would regulate and certify airlines, maintenance organizations and personnel, while a separate entity would run air traffic services and airport infrastructure.

Nepal's air safety record has drawn sustained scrutiny. The Himalayan terrain, short and steeply sloped runways, and rapidly changing weather place unusual demands on operators, and the country has seen a series of fatal accidents across both scheduled and commuter operations in recent years. Those accidents have kept Nepal on the European Commission's air safety list, which bars Nepali carriers from flying into the EU — a restriction with direct network and commercial consequences for airlines such as Nepal Airlines and Himalaya Airlines that hold wide international ambitions.

Why does combining regulator and operator matter?

The structural problem is well understood in international aviation governance. When the same institution both oversees safety and earns revenue from the traffic it supervises, oversight can weaken — the regulator has an incentive to keep flights moving and avoid findings that would restrict operations at the airports or routes it also manages.

The International Civil Aviation Organization (ICAO), through its Universal Safety Oversight Audit Programme, has repeatedly pressed states to separate these functions. Countries that have completed the split — India, Pakistan and several Southeast Asian states among them — did so explicitly to strengthen independence and bring audit results in line with ICAO standards.

For Nepal, the restructuring would answer a long-standing criticism: that the current arrangement leaves the regulator neither fully independent nor fully accountable for the safety outcomes of the system it simultaneously manages.

What could change for airlines and passengers?

The immediate effect for Nepali carriers is institutional, not operational. Flights continue under existing certificates and approvals; the change, once enacted, alters who oversees them and under what mandate.

The longer-term stakes are larger. A regulator that meets ICAO benchmarks more cleanly strengthens Nepal's case for removal from the EU air safety list — the step that would open European routes to Nepali carriers. It also matters for code-share agreements, insurance costs and fleet investment decisions, all of which price in the country's regulatory standing.

Implementation will be the test. Comparable reforms elsewhere required new legislation, staff transfers and funding arrangements for both successor bodies, and in several cases took years from announcement to full operational separation. Nepal's parliament, finance ministry and tourism and civil aviation ministry will all have a role, and the timeline for the split has not been fixed.

What comes next?

Drafting of the legal framework and the division of assets and staff are the first practical steps; the measure's credibility with ICAO and foreign regulators will depend on whether the new oversight body receives genuine independence and budget, rather than a renamed version of the current arrangement.