Nepal’s National Assembly Legislation Management Committee has passed a bill proposing a five-fold increase in compensation for domestic airline passengers in case of death, serious injury, or disability, raising it to $100,000. The bill, however, faces a delay as the federal parliament’s current session concludes today, Friday, October 2, 2026.
The committee, chaired by Krishna Bahadur Rokaya, unanimously approved the ‘Domestic Air Service Liability Bill, 2083’ on Thursday, submitting it to the National Assembly, the upper house of parliament, for approval. The bill seeks to replace the current minimum compensation of $20,000 for passengers, which is based on an understanding between Nepal Civil Aviation Authority (CAAN), the regulatory body, and airlines, but lacks legal backing. For crew members, the current minimum compensation is $40,000.
The bill mandates airlines to pay up to $100,000 if a passenger suffers serious injury, disability, or death during boarding, flight, or disembarkation. It also extends the claim period for compensation for the next of kin of deceased individuals to 180 days, up from the previous 90 days, according to the research brief. Airlines will be required to disclose their insurance coverage and face penalties for failing to pay claims within the stipulated period.
The proposed legislation aims to align Nepal’s aviation laws with international standards, particularly the 1999 Montreal Convention, to which Nepal became a party on December 15, 2018. While the Montreal Convention governs liability in international air travel, this new bill specifically defines airline responsibilities for domestic flights, covering accidents, flight delays, lost baggage, and disruptions. The Montreal Convention sets a liability limit of up to $202,500 for death or injury in international flights, with a two-tiered system.
The bill also outlines provisions for non-fatal injuries, requiring airlines to arrange necessary medical treatment. In fatal accidents, airlines must arrange for the repatriation of the deceased’s body and provide advance funds for funeral and transportation expenses. For flight delays or cancellations, airlines must notify ticketed passengers at least three hours before the revised departure time. In cases of overbooking, airlines must arrange alternative seats on another carrier or provide a full refund.
The bill sets compensation limits for lost or damaged baggage: up to $5,000 for checked baggage (at least $20 per kilogram) and up to $400 for unchecked (hand-carry) baggage. Payments for baggage compensation will be made in Nepali currency.
The bill was registered in the National Assembly on July 30, 2026, and underwent five detailed discussions in the Legislation Management Committee before its unanimous passage. However, with the federal parliament’s current session concluding today, Friday, October 2, 2026, at midnight, the bill will only proceed in the next session, the President’s Office said. After approval by the National Assembly, it will require endorsement from the House of Representatives, the lower house of parliament. The government can then formulate rules through the Council of Ministers for its implementation, covering details like information on air tickets, facilities for delayed/cancelled flights, baggage damage, and insurance rates.
The exact dates for the National Assembly’s approval, the House of Representatives’ endorsement, and the formulation of implementing regulations remain uncertain.
