KATHMANDU: A high-level study and recommendation committee formed to reform Nepal’s civil aviation sector has advised the government to split Nepal Airlines Corporation into three separate bodies.

The committee, chaired by Industry, Commerce and Supplies Minister Anil Kumar Sinha, submitted its report outlining a structural overhaul and a new financial model to rescue the struggling national carrier.

According to the report, Nepal Airlines should first undergo a capital restructuring aligned with the Company Act 2063. It recommends changing the ownership structure, converting the corporation into a company, investing through government-owned institutions and funds, registering shares, and establishing a new public company to manage future operations.

The committee argues that these steps are necessary to meet the corporation’s immediate capital requirements and prepare it for long-term reform.

The report proposes that the services currently operated under one umbrella be run as independent entities. Ground handling would be operated by Nepal Airlines Company Limited, international flights by Nepal Aviation Services Company Limited, and domestic flights would remain under Nepal Airlines Corporation.

The document suggests that two of these entities could be listed on the Nepal Stock Exchange once separated, while the domestic wing could continue under the corporation’s existing structure. It further recommends enhancing domestic operations by adding four aircraft suitable for trunk routes and 18-seat aircraft for remote-area flights, keeping the service as a government-backed provider.

The committee also advises raising Nepal Airlines Corporation’s paid-up capital from the current Rs 300 million to Rs 5 billion after the division, arguing that the increase is essential to stabilize the carrier and enable future expansion.