KATHMANDU: The government has registered a new bill in the National Assembly that proposes compensation for passengers in cases of lost baggage, flight delays, cancellations and air accidents on domestic flights.
The proposed Domestic Air Service Liability Bill, 2083 was tabled by Minister for Culture, Tourism and Civil Aviation Khadka Raj Paudel. The bill aims to strengthen passenger rights by making domestic airlines more accountable for service disruptions, baggage handling and accident-related liabilities.
Under the proposed law, airlines will have to compensate passengers if checked baggage is lost, destroyed or damaged. Compensation will be set at USD 20 per kilogram, up to a maximum of USD 500 (around Rs 77,000) in Nepali currency.
The bill states that the compensation limit is intended to create a predictable standard for baggage claims, define the liability of both airlines and passengers, and provide passengers with financial protection.
For cargo shipments, airlines will have to compensate the sender based on the declared value if it is mentioned in the air waybill. If no value has been declared, compensation will be limited to USD 10 per kilogram in Nepali currency.
However, airlines will not be held liable if flights are delayed, canceled or suspended due to bad weather, natural disasters, airport restrictions or air traffic safety reasons.
Similarly, airlines will not be responsible if injuries, disability or death are proven to have resulted from a passenger’s gross negligence or a pre-existing serious medical condition.
Compensation for flight delays
The bill also requires airlines to compensate passengers if flights are disrupted due to the airline’s own fault.
According to the proposal, airlines must transport ticketed passengers safely to their destination on the scheduled date and time.
If a flight is delayed, canceled or suspended, passengers must be informed at least three hours in advance. If the disruption is caused by the airline, including operational issues or capacity constraints, passengers must receive the prescribed facilities and compensation.
USD 100,000 compensation for death
The proposed bill raises compensation for passengers who die in domestic air accidents.
If a passenger dies in an accident, the airline will have to provide the deceased’s legal heirs with USD 100,000 (around Rs 15.4 million) as compensation.
If the full amount cannot be paid immediately, the airline must provide at least Rs 500,000 when handing over the body to cover funeral expenses. This amount will later be deducted from the total compensation.
At present, domestic airlines are required to pay USD 20,000 per passenger in the event of death.
The bill also proposes compensation of up to USD 100,000 for passengers who suffer bodily injury or permanent disability in an air accident.
Mandatory insurance for airlines
The proposed law also makes insurance mandatory for domestic airlines.
Airlines will be required to obtain insurance covering passengers, cargo, third-party liabilities, war, terrorist activities, hijacking, search and rescue operations, and environmental protection risks.
If an airline fails to obtain the required insurance, the Civil Aviation Authority will be able to suspend its flights by giving a 35-day notice. If the airline still fails to comply within that period, its Air Operator Certificate can be cancelled.
Existing domestic airlines will be required to complete the insurance coverage within three months of the law coming into force.
