The aviation industry in Nepal, while relatively young, has experienced significant growth and is crucial for the country’s connectivity – both domestically (given Nepal’s challenging terrain and limited road networks) and internationally (supporting tourism and commerce). Over the past few decades, Nepal has seen a proliferation of domestic airlines (fixed-wing and helicopters) serving remote areas, as well as the introduction of private international airlines in partnership with foreign investors. Large infrastructure projects, such as the expansion of international airports and construction of new regional airports, are also underway to accommodate rising air traffic. However, aviation in Nepal operates under stringent regulations and oversight due to the inherent safety risks. The Civil Aviation Authority of Nepal (CAAN) regulates all aspects of civil aviation, including the certification of airlines and aircraft, airworthiness standards, pilot and crew licensing, and air traffic management. Additionally, Nepali carriers and the aviation regulator must adhere to international standards set by bodies like ICAO (International Civil Aviation Organization) and address any findings from international safety audits. The industry also faces commercial and operational challenges – such as volatile fuel prices, high insurance costs due to perceived risks, and the need to maintain skilled human resources – which often require legal and strategic solutions.

Gandhi & Associates has positioned itself as one of the leading legal advisors in Nepal’s aviation sector, with extensive experience working with both carriers and regulatory authorities. We assist clients in establishing airlines and aviation businesses, including obtaining Air Operator Certificates (AOC) for new airlines or adding new aircraft to existing AOCs, and in structuring joint ventures or foreign direct investments in aviation (in compliance with Nepal’s ownership restrictions and approvals process). Our team advises on aircraft lease and purchase transactions – negotiating Aircraft Sale/Purchase Agreements, operating and finance leases, engine and parts leasing, and handling registrations with CAAN and the entry of aircraft into Nepal (including customs and import duty considerations). We are well-versed in drafting and reviewing contracts critical to airline operations, such as agreements for ground handling, maintenance (MRO contracts), code-share and interline agreements between airlines, and global distribution system (GDS) contracts. Regulatory compliance is a significant part of our aviation practice: we counsel airlines on meeting safety and maintenance requirements, resolving any findings or directives issued by CAAN, and ensuring compliance with consumer protection rules (such as passenger rights in case of delays or cancellations). Gandhi & Associates also has a strong dispute resolution practice in aviation – we have represented clients in liability claims (for instance, passenger or cargo claims under the Montreal Convention regime), insurance disputes, and arbitrations arising from commercial disagreements (such as charter contract disputes or shareholder disputes within aviation companies). Moreover, our firm has been engaged in providing policy-level advice, having contributed to drafting or reviewing aviation-related regulations and guidelines alongside the authorities. With a comprehensive approach that covers transactional, regulatory, and contentious aspects, we help our aviation clients soar while staying securely within the bounds of the law.

Representative Experience:

• Advised a domestic airline operator in Nepal on capital restructuring and operational agreements. This included facilitating a new share subscription by incoming investors and representing the airline in arbitration proceedings with a service provider, resulting in a resolution that preserved flight operations;
• Advised an international carrier operating in Nepal under a foreign joint venture structure on a range of regulatory and compliance matters, including approvals for fleet expansion, bilateral air service agreements for new routes, and drafting passenger terms and conditions aligned with international aviation conventions and domestic consumer law;
• Advised Nepal Airlines, the national flag carrier, on multiple cross-border aircraft transactions, including the acquisition of two wide-body aircraft from a European manufacturer and the divestment of legacy aircraft. Our role included negotiation of financing and transaction documents and ensuring compliance with international aviation regulations; and
• Assisted a private helicopter charter company in obtaining its Air Operator Certificate and expanding its fleet. Our services included regulatory approvals for aircraft import and registration, compliance with aviation safety standards, and preparing service contracts and liability waivers for adventure tourism flights.