Civil Aviation Authority of Nepal

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Civil Aviation Authority Nepal (CAAN)

नेपाल नागरिक उड्डयन प्राधिकिण

Agency overview

Formed December 31, 1998

 Department of Civil Aviation

Preceding agency

Jurisdiction Nepal

Headquarters Babar Mahal, Kathmandu, Nepal

Annual budget NRs 45.17 billion (2075/76 B.S.)[1]

Minister  Mr. Yogesh Kumar Bhattarai, Minister of Culture, Tourism and

responsible Civil Aviation


Agency executive Rajan Pokhrel, Director General of CAAN

Parent agency Ministry of Culture, Tourism and Civil Aviation, Government

of Nepal

Website http://www.caanepal.gov.np

[2]

The Civil Aviation Authority of Nepal (CAAN, Nepali: नेपाल नागरिक उड्डयन प्राधिकिण , Nepāl [3]

Nāgarik Uḍḍayan Prādhikaraṇ), an independent Nepali government body since 1998, is

headquartered in Kathmandu. [4]

The CAAN began in 1957 as an agency under what was the Ministry of Work, Communications and
Transport. On 31 December 1998, as a result of the Civil Aviation Act of 1996, the CAAN was
established as an independent regulatory body. It is the board which issues new pilot licenses,
renews licenses and convert the licenses through various tests. [5]

The Aircraft Accident and Incident Investigation Division investigates aircraft accidents and
incidents. However, as of September 2017, the Government of Nepal is trying to establish an
[6]

independent aircraft accident investigation unit in order to comply with the International Civil Aviation
Organization's regulations. The committee, which is formed after individual accidents is only
temporary and often criticized for a lack of results. [7]

There was a minor scandal in September and October 2017, when the Ministry of Culture, Tourism
and Civil Aviation transferred the director general of the agency, Sanjiv Gautam, to the ministry itself,
which was considered an attempt of sacking him. The Election Commission revoked this move, as it
saw a "a breach of the election code of conduct." [8][9]

The agency's annual report lists the following main tasks: [10]

 Issuance of Airworthiness Certificate and License, Rating and Certificate to aviation personnel
 Safety Oversight of Aviation Service Provider Organizations
 Issuance of Technical Regulations like Civil Aviation Requirements, Directives, Manuals,
Advisory Circulars etc.
 Certification of Aerodromes
 Construction, Operations and Management of aerodromes
 Provide Air Navigation Services except Aviation Meteorology
 Advise Government of Nepal on Civil Aviation Matters

4.2.1.2 Role and functions of Ministry of Culture, Tourism and Civil Aviation (MoCTCA) and Civil
Aviation Authority of Nepal

Tourism reaches into the varied aspects of Nepalese life and its benefits are encompassed by diverse sectors
directly and indirectly. It generates employment opportunities and helps in the promotion and conservation of
the art and culture. The tourism industry is one of the foreign currency earners in the country and thus makes a
significant contribution to the economy. Government of Nepal has been actively promoting tourism in Nepal and
has always encouraged the private sector for their involvement and participation.
The Ministry of Culture, Tourism & Civil Aviation (MOTCA) gives equal importance to conservation of natural,
cultural and human resources.
Ministry of Tourism first came into existence in 2035 BS (1978 AD). In 2039 (1982 AD), Civil Aviation was also
merged into the Ministry of Tourism and it became the Ministry of Tourism & Civil Aviation. In 2057 (2000 AD),
Cultural sector was also integrated in the Ministry and called the Ministry of Culture, Tourism & Civil Aviation
(MOCTCA).
In August 31, 2008 (B.S. 2065-5-15) the ministry was divided into two ministries, i.e. Ministry of Tourism and
Civil Aviation and Ministry of Culture and State Restructuring. The name of the ministry became the Ministry of
Tourism and Civil Aviation (MOTCA). The cultural sector has been integrated with the tourism and civil aviation
on May 18, 2012 (2069-02-05 BS). The name of the ministry has now become the Ministry of Culture,
Tourism and Civil Aviation.
In 1957, the Department of Civil Aviation was formally established under the then Ministry of Work, Communications and Transport
of the Government of Nepal. The statutory regulations regarding civil aviation were introduced under the Civil Aviation Act, 1959
(2015 BS). Nepal obtained the membership of International Civil Aviation Organization (ICAO) in 1960.
The Government of Nepal introduced its first ever Civil Aviation Policy in 2050 B.S. (1993 A.D.). This policy made the provision of
transformation of Department of Civil Aviation into an autonomous Civil Aviation Authority. Accordingly, Civil Aviation Authority of
Nepal (CAAN) was established as an autonomous regulatory body on 31 December 1998 under Civil Aviation Act, 1996. CAAN is
the regulator of civil aviation as well as the service provider in the areas of Air Navigation Services and Aerodrome Operations.
In 1957, the Department of Civil Aviation was formally established under the then Ministry of Work, Communications and Transport
of the Government of Nepal. The statutory regulations regarding civil aviation were introduced under the Civil Aviation Act, 1959
(2015 BS). Nepal obtained the membership of International Civil Aviation Organization (ICAO) in 1960.
The Government of Nepal introduced its first ever Civil Aviation Policy in 2050 B.S. (1993 A.D.). This policy made the provision of
transformation of Department of Civil Aviation into an autonomous Civil Aviation Authority. Accordingly, Civil Aviation Authority of
Nepal (CAAN) was established as an autonomous regulatory body on 31 December 1998 under Civil Aviation Act, 1996. CAAN is
the regulator of civil aviation as well as the service provider in the areas of Air Navigation Services and Aerodrome Operations.

Mission: Ensuring Safe, Secured, Efficient, Standard and Quality Service in Civil Aviation and Airport Operations.
Vision: Making Air Services an Effective Vehicle of high Economic Growth through Wide Scale Tourism Promotion and Accessibility

4.2.1.3 Role of International Civil Aviation Organization (ICAO)

Civil Aviation Authority of Nepal (CAAN) was established on 31 Dec, 1998. It is one of the major regulatory organ of the
government which has been established with the motto of making the aviation field of our nation safe ,standard, reliable as well
as efficient too as per the rules and direction of International Civil Aviation Organisation (ICAO). The prime goal of CAAN is to
create sustainability of flight safety. It issues new pilot licenses, engineer licenses, renew licenses and convert licenses from one
rank to other through several exams and tests.

It consists of Director General Specialist group, Management group, Aviation Technical and Airport Management group, Air
Transportation and Air Traffic Services group, Aviation Security group, Engineering Department, Finance department, Aviation
Safety department, Administration Department and so on.

To develop and expand the civil aviation of Nepal by the expansion of civil aviation services at the national and international
level. For the development of air communication and air navigation too, CAAN plays vital role. It’s function is to permit the
airlines operation, carry out the Air Service Agreement (ASA) with several countries, Operate and carryout maintenance of
airports with required communication and navigation facilities. Any aircraft that airlines buy need to go through strong tests such
as flight safety record, proving flights, inspection etc conducted by CAAN and so on.

4.2.1.4 The economic, political, and social roles of airports

Impact of Airports – Political, Environmental

and Social
3339 words (13 pages) Essay in Tourism

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Airports play an important economic role within their local communities. Airports serve a significant role in the
economic shaping of the communities of which they serve due to the sheer actuality that they are among the
largest public facilities in the world. It is well understood that a viable and efficient transportation system is a
fundamental and necessary component to the economy of any region (Wells & Young, 2004).

Although there is no doubt that the presence of an airport has great positive impacts on a surrounding
community from an economic standpoint, the presence of an airport, much like any large industrial complex,
unfortunately impacts the community and surrounding natural environment in what many consider a negative
manner. These effects are a result of activity whose sources is the airport itself and of vehicles, as well as both
aircraft and ground vehicles, which travel to and from the airport (Wells & Young, 2004).

Examine the political, environmental and social impact an airport has on its local community. Analyze some
rules and regulations that govern environmental impact activities, and explain how their strategies help satisfy
the needs of the local communities while maintaining sufficient airport operations. Determine and evaluate the
role technology plays in mitigating the risks and reducing the environmental impacts created by airport activity.
Determine if a relationship exist between community economic growth indicators and airport activity.

Program Outcome addressed by this question.

1. P.O. #1: Students will be able to apply the fundamentals of air transportation as part of a global, multimodal
transportation system, including the technological, social, environmental, and political aspects of the system to
examine, compare, analyze and recommend conclusion.

A literary review will analyze the environmental impacts of airports on the surrounding communities in which
they serve. An evaluation of environmentally related complaints filed against aviation activity and reported to
the FAA will determine the most significant environmental impacts associated with airports. Predicting the
future of the global multimodal air transportation system is impossible without first understanding the local
role and responsibility of each component of the air transportation system. This question will show evidence of
satisfying the Program Outcome by demonstrating how the social, economical, political, and environmental
fundamentals of an airport are an integral part of the air transportation system, and how these factors
contribute to the relationship that an airport has with its surrounding communities.

Research and Analysis

Airports serve a significant role in the political, economic, and social shaping of the communities of which they
serve due to the sheer actuality that they are among the largest public facilities in the world.

Political Roles
A major commercial airport is a huge public enterprise. Some are literally cities in their own right, with a great
variety of facilities and services (Wells & Young, 2004). Although the administrative functions and
responsibilities of these facilities are governed by public entities, airports are also comprised of private
dispositions. Commercial airports must be operated in cooperation with the air carriers that provide air
transportation service and all airports must work with tenants, such as concessionaires, fixed-based operators
(FBOs), and other firms doing business on airport property. This amalgamation of public management and
private enterprise fashions a unique political role for airport management (Wells & Young, 2004).

Airline carrier-airport relationships.

One of the most prominent and essential relationships in the aviation industry is the airport airline relationship.
When viewing the relationship from the airlines’ standpoint, an airport is a point along their route system for
the purpose of enplaning, deplaning, and transferring passengers, cargo, and freight. To facilitate effective and
efficient operations, the airlines necessitate specific facilities and services at each airport. The specified
requirements of the airports are as varied and unique as the airlines who request them; however, they scarcely
remain stagnant, as they are ever changing and evolving to meet the needs of traffic demands, economic
conditions, and the competitive climate. Before airline deregulation in 1978, response to changes of this sort
was slow and mediated by the regulatory process. Airlines had to apply to the Civil Aeronautics Board (CAB) for
permission to add or drop routes or to change fares. CAB deliberations involved published notices, comments
from opposing parties, and sometimes hearings that could take months, even years, and all members of the
airline airport community were aware of an airline carrier’s intention to make a change long before they
received permission from the CAB (Wells & Young, 2004). The Deregulation Act of 1978 enabled air carriers to
change their routes and fares without awaiting the approval of the CAB. Many of these changes occurred on
short notice, thus causing airline necessities and requirements at airports to change with haste.

Contrary to the viewpoints of air carriers, which operate at multiple airports over a route system connecting
many cities, airports concentrate on accommodating the interests of a variety of users at a solitary location.
Airport operators and managers have the strenuous task of ensuring that they meet all the demands and
requirements of their airline carriers while maintaining their resources. Due to the rapidly changing specifics of
each airline carrier, airports often find their services and facilities needing improving or refurbishing, requiring
major capital expenditures or even making obsolete an already constructed facility. Airport operators and
managers must exercise diligence and caution in realizing that they accommodate and must meet the needs of
other tenants and users besides the airline carriers, and must ensure that the airport’s landside facilities are
effectively and efficiently utilized. Although the landside facilities are of minimal importance to the airline
carriers, their efficiency can severely have an effect on and be affected by their operations.

Despite their notably different perspectives, airline carriers and airports share the collective objective of making
the airport a successful and established economic venture in which both parties can benefit and prosper from.
Traditionally the relationship between the airline carriers and airports has been formally fused through the use
of airport user agreements which establish the circumstances and methodology for establishing, calculating,
and collecting usage fees and charges. These agreements are also used to identify the rights and privileges of
air carriers, sometimes including the right to approve or disapprove any major proposed airport capital
development projects (Wells & Young, 2004). Residual cost airports, or airports where two or more air carriers
assume financial risk by agreeing to pay any cost of running the airport that are not allocated to other users,
typically have longer-term use agreements than compensatory airports, with agreements of terms of 20 or
more years and terms of 30 years or longer not being uncommon. On the other hand, only approximately half
of compensatory airports, or airports in which the airport operator assumes the financial risk of running the
airport and charges the air carrier fees and rental rates set so as to recover the actual costs, have agreements
running for 20 years or more, with many of the compensatory airports having no contractual agreements
whatsoever with the airline carriers (Wells & Young, 2004).

Concessionaire-airport relationships.
Another vital relationship which attributes to an airport’s success is the relationship between the airport and the
concessionaires. This is due to the fact that the majority of airports rely on their concessionaires in order to
generate a considerable amount of their non-aviation related revenues. Airports maintain management
contracts and concession agreements with the concessionaires who provided the airport with services and
facilities such as banks, restaurants, hotels, car rental companies, parking facilities, bookstores, bars, gift shops,
taxi services, and business centers. The context of these agreements varies to a great extent; however, they
typically extend the various concessionaires the privilege of operating on the property of the airport in
exchange for the greater payment of either a minimal annual fee, or a percentage of the revenues. These
agreements can vary from outlet to outlet at the same airport depending upon location, nature of business,
forecast turnover and whether or not the outlet is new (Francis et. al, 2004). The tenure of each agreement
between the airport and the various concessionaires and the financial circumstances affixed to each will vary by
airport and concessionaire. The length of the contractual agreement is dependent upon an array of criteria, with
one of the most important being the level of investment required from the retailer. If little investment is
required then a contract is often short term; however, if any substantial level of investment is required from the
retailer then a contract of five years would be considered the minimum (Freathy & O’Connell, 1999).
A concessionaire who is often overlooked when speaking of concessionaire, despite its critically important role,
is the fixed based operator (FBO). FBOs generally provide services for airport firms, users, and tenants lacking
facilities of their own, typically through fuel sales, and aircraft repair, service, and maintenance facility
operations. The contracts and agreements between airport operators and FBOs vary due to FBOs constructing
and developing its own facilities on airport property in some cases, and FBOs simply managing facilities
belonging to the airport in other cases.

In addition to concessionaires, some airport authorities serve as landlord to other tenants which may reside and
operate on airport property such as industrial parks, freight forwarders, and warehouses, all of which can
provide significant revenue. It is the responsibility of airport management to maintain fruitful political
relationships with all tenants, by ensuring reasonable lease fees, contract terms, and an overall mix of tenants
that meet the needs of the airport and the public it serves (Wells & Young, 2004).

General aviation-airport relationships.

In contrast to airline carriers and concessionaires, contractual agreements are rarely used to characterize and
solidify the relationships between airport operators and general aviation (GA). GA is a diverse group which can
be comprised of GA aircraft owned and operated by an assortment of organizations and individuals for a
miscellaneous number of leisure, business, or instructional purposes. Agreement when they are in place, are
seldom long term due to the variety and diversity of owners and aircraft type and use. Airport facilities, in
particular storage space such as hangars and tie-downs, are often leased from the airport with the airport
playing the role of landlord in a landlord-tenant relationship. Thus, at the airport, the primary needs of GA are
parking and storage space, along with facilities for fuel, maintenance, and repair. Whereas as air carrier might
occupy a gate for an hour to deplane and enplane passengers and load fuel, a GA user might need to have
property space to park an aircraft for a day or more (Wells & Young, 2004).

Airport-public relations.
Indubitably, one of the most vital and challenging relationships that an airport must foster and maintain, is the
relationship between the airport and its community it serves. The overall goal of the airport must be to create
goodwill and a positive reputation for the airport and its products, services, and ideals with the community,
who can affect its present and future welfare. Without regards to the size, location, or activity scope of an
airport, every airport four publics in which it must deal with. These publics include the 1) external business
public, which includes all segments of the business, government, educational, and general flying public; the 2)
external general public, which is all the local citizens and taxpayer, many of whom have never been to the
airport but who vote on airport issues or who represent citizens groups with particular concerns; the 3) internal
business public, which includes the businesses and enterprises who interests are tied directly to the airport-the
airlines, FBOs, other members of the GA community, government officials, and other aviation and travel-
oriented local businesses and trade organizations, and the employees of all these enterprises; and the 4)
internal employee public comprised of everyone who works for the airport and its parent organization (Wells &
Young, 2004). Like any other facility that is a part of and serves the total community, the airport requires total
understanding by its community and publics, and must ensure that it creates an environment and atmosphere
of awareness and acceptance.

Airport regulatory policies.

The airport has many organizations who are profoundly interested in their operations, and in developing and
preserving airports due to their role in the national air transportation system and their value to the communities
and publics they serve. The primary goal of these groups is to provide political support for their causes with
hopes to influence federal, state, and local laws concerning airports and aviation operations in their favor (Wells
& Young, 2004). Some of the most prominent groups include the Aerospace Industries Association (AIA), the
Aircraft Owners and Pilots Association (AOPA), the Air Line Pilots Association (ALPA), the Airports Council
International-North America (ACI-NA), the Air Transport Association of America (ATA), the American Association
of Airport Executives (AAAE), the Aviation Distributors and Manufacturers Association (ADMA), the Experimental
Aircraft Association (EAA), the Flight Safety Foundation (FSF), the General Aviation Manufacturers Association
(GAMA), the Helicopter Association International (HAI), the International Air Transport Association (IATA), the
National Agricultural Aviation Association (NAAA), the National Air Transportation Association (NATA), the
National Association of State Aviation Officials (NASAO), the National Business Aviation Association (NBAA), the
Professional Aviation Maintenance Association (PAMA), and the Regional Airline Association (RAA).

Economic Roles
Unquestionably, airports are economic locomotives and a reflection of the community, publics, and region in
which they reside, serve, and represent. Transportation, by definition, provides the ability for people and goods
to move between communities, thus leading to trade and commerce between markets, which in turn, lead to
jobs, earnings, and overall economic benefit for a community’s residents (Wells & Young, 2004).

Transportation role.
Despite the fact that there are numerous modes of transportations, to include automobiles, trains, trucks, and
ships, air travel has had a significant impact on trade and commerce that is absolutely unrivaled by any other
transportation mode. In comparison to their sister modes of transportation, travel in the aviation system allows
substantial amounts of passengers and cargo to travel internationally in relatively short periods of time,
resulting in communities garnering extraordinary and exceptional economic benefit through providing them
access to various world-wide markets.

Stimulating economic growth.

The airport has become vital to the growth of business and industry in a community by providing air access for
companies that must meet the demands of supply, competition, and expanding marketing areas. Economic
impacts of airports are measured according to direct impact and indirect, or induced, impact. Directs impacts
include the economic activities carried out at the airport by airline carriers, airport management and operators,
FBOs, and other firms, and tenants with a direct involvement with aviation. Airports and the agencies and
tenants that directly impact the airports represent a major source of employment for their various outlying
communities, with the wages and salaries earned by the employees of airport-related business having a
significant direct economic impact on the local communities’ economy by providing the means to purchase
goods and services while generating tax revenues as well. Local payrolls are not the only measure of an airport’s
economic benefit to the community. In addition, the employee expenditures generate successive waves of
additional employment and purchases that are more difficult to measure, yet nevertheless substantial (Wells &
Young, 2004).

Total Airport Earnings and Employment (Earnings in Millions)

Category Earnings Jobs

Salaries $208.91 4,870

Local Fuel Purchases $3.99 237

Local Non-Fuel Purchases $4.23 252

Rent $18.35 723

Equipment Purchases $1.39 82

Utilities $8.07 318

Contractual Services $41.77 1,647

State Taxes $10.16 125

Local Taxes $27.42 338

Other Spending $73.14 901

Hotel Spending $42.20 2,234

Construction $19.11 743

Total $458.74 12,471

* Totals may not add due to rounding

Table 1: Louis Armstrong New Orleans International Airport (MSY) 2004 earnings and employment. Taken from
MSY 2004 Airport Report

In addition to the direct economic impact generated by the airport, the outlying communities receive indirect,
or induced, impact generated by economic activities by on-airport businesses and off-airport business activities
associated with the airport through-put, such as hotels, gas stations, restaurants, and travel agencies, as well
their roles in facilitating trade and tourism, among others. The airport also indirectly supports the local
economy through the use of local services for air cargo, food catering to the airlines, aircraft maintenance, and
ground transportation on and around the airport, as regular purchases of fuel, food, goods, supplies,
equipment, and other services permeate additional income into the communities surrounding the airport. The
local economy’s tourism and business convention industry can also receive economic growth and substantial
revenues indirectly impacted by the airport through air travelers’ patronage and use of hotels, restaurants, retail
stores, sports and night clubs, rental cars, and local transportation, among others.

Beyond the benefits that an airport brings to the community as a transportation facility and as a local industry,
the airport has become a significant factor in the determination of real estate values in adjacent areas. Land
located near airports almost always increases in value as the local economy begins to benefit from the presence
of the airport. Land developers consistently seek land near airports, and it follows inexorably that a new airport
will inspire extensive construction around it (Wells & Young, 2004).
TOTAL TAX REVENUE CREATED (In millions of $s)

CATEGORY INCOME

State

Direct $9.95

Income $7.18

Selective Sales $7.52

General Sales $8.90

Business $2.48

Total State $36.04

Local Sales $10.57

Local Direct $23.83

Local Property Taxes $0.97

Total Local $35.38

State Plus Local $71.41

* Totals may not add due to rounding

Table 2: MSY Tax revenue created 2004. Taken from MSY 2004 Airport Report

Airports are a major force and contributor to the local, regional, and national economy with an impact that
goes well beyond the actual physical boundaries of the airport. As cargo and passenger continue to rise, and
infrastructure continue to improve, the importance and impacts of airports as economic catalyst will also
continue to increase.

Environmental Roles
Although there is no doubt that the presence of an airport has great positive impacts on a surrounding
community from an economic standpoint, the presence of an airport, much like any large industrial complex,
unfortunately impacts the community and surrounding natural environment in what many consider a negative
manner. These effects are a result of activity whose sources is the airport itself and of vehicles, as well as both
aircraft and ground vehicles, which travel to and from the airport (Wells & Young, 2004).

Noise Impacts.
Conceivably the most noteworthy environmental impact associated with airports is the noise emanated by the
taking off and landing of aircraft, with engine maintenance and taxiing aircraft following closely behind. The
impact of such noise on communities is usually analyzed in terms of the extent to which the noise annoys
people by interfering with their normal activities, such as sleep, relaxation, speech, television, school, and
business operations (GAO, 2000). According to a 1978 study that has become the generally accepted model for
assessing the effects of long-term noise exposure, when sound exposure levels are measured by the method
that assigns additional weight to sounds occurring at night (between 10 p.m. and 7 a.m.), and those sound
levels exceed 65 decibels, individuals report a noticeable increase in annoyance (Schultz, 1978). There is
increasing evidence that high exposure to noise has adverse psychological and physiological effects and that
people repeatedly exposed to loud noises might exhibit high stress levels, nervous tension, and inability to
concentrate (Wells & Young, 2004).

Since the beginning of aviation, airports have always had conflicts with their neighboring communities;
however, noise did not become an issue until the 1960s introduction of the commercial jet. It is estimated by
the Federal Aviation Administration (FAA) that between 1960 and 1970, the land area affected by aviation-
related noise and the complaints they received with noise as the culprit increased sevenfold.

4.2.2 Airport planning