Upper House Committee Approves Domestic Airline Liability Bill With $100,000 Compensation Cap
A National Assembly committee has passed the Domestic Airline Liability Bill, setting air crash death compensation at $100,000 while introducing stricter rules for delays and baggage loss.
The Legislation Management Committee of the National Assembly has approved the draft Domestic Airline Liability Bill, advancing legislation that will raise the statutory compensation for domestic air crash fatalities and severe injuries to $100,000.
The committee unanimously endorsed the draft on Thursday and tabled it in the upper house, committee chairperson Krishna Bahadur Rokaya told The Kathmandu Post. If approved by parliament, the new framework will replace the long-standing domestic liability minimum of around $20,000, establishing Nepal's first standalone domestic aviation liability law since the country ratified the Montreal Convention in December 2018.
During committee deliberations, lawmakers debated whether the proposed financial ceiling was sufficient. Nepali Congress lawmaker Kham Bahadur Khati pressed the panel to raise the death compensation cap to $150,000, arguing that the $100,000 threshold had been drafted nearly a decade ago and failed to reflect recent currency shifts, as reported by Onlinekhabar and Clickmandu. Khati also called for mandatory five-year reviews of compensation levels.
However, Minister for Culture, Tourism and Civil Aviation Khadak Raj Paudel warned against exceeding the proposed $100,000 threshold, Onlinekhabar and Clickmandu reported. Paudel noted that jumping from the current $20,000 practice to $100,000 already represents a five-fold increase, and cautioned that steeper liabilities would inflate insurance premiums and inevitably lead to higher passenger airfares. The committee kept the payout ceiling at $100,000.
To ease immediate financial stress on bereaved families, the bill mandates that airlines provide at least Rs 500,000 in immediate cash assistance for funeral expenses upon the handover of a victim's body, according to Onlinekhabar and Clickmandu. This amount will be deducted from the final compensation payout, and carriers face penalties if they fail to provide the funds promptly.
As detailed by The Kathmandu Post, the legislation also establishes airline obligations for delays, cancellations, and baggage handling. Carriers must give passengers with valid tickets at least three hours' notice before rescheduled departure times. If a flight is overbooked, airlines must offer alternative travel at no extra cost or provide an immediate full refund. The bill sets liability for lost or damaged checked baggage at $20 per kilogram up to a maximum of $5,000, paid in Nepali currency, and carry-on baggage loss at up to $400. Third-party ground liability insurance is scaled from $25 million to $60 million based on aircraft weight.
Outlets diverged on the deadline for filing claims under the amended draft. Onlinekhabar reported that the committee extended the window for a deceased passenger's legal heirs to submit claims from 90 days to 180 days. Conversely, The Kathmandu Post reported that the draft establishes a 120-day window for victims or their families to lodge compensation claims.