Nepal has initiated the process to revive a long pending amendment regarding aviation liability and insurance regime in its domestic aviation sector.
According to a news report in the Nepalese daily The Kathmandu Post, under the proposed law, domestic airlines would be liable to pay compensation of up to $100,000 if a passenger suffers serious injury, disability or death in an accident during boarding, flight or disembarkation.
The report said this amendment would overhaul Nepal’s domestic aviation liability and insurance regime and align the country’s aviation laws with international standards years after ratifying the Montreal Convention 1999.
The proposed draft bill is currently with the country’s Ministry of Law for legal opinion, signalling fresh momentum for reforms that have remained stalled since 2019.
The Kathmandu Post report says, “Although the Montreal Convention governs liability only in international air travel, the proposed legislation seeks to bring Nepal’s domestic aviation liability framework closer to global norms by clearly defining airlines’ responsibilities in cases of accidents, delays, baggage loss and flight disruptions.
“The Bill establishes passengers’ rights and carriers’ obligations, while introducing comprehensive provisions on compensation, cargo liability, insurance coverage and circumstances under which airlines may be exempt from liability.”
The minimum compensation for the death or injury of a passenger on a domestic flight in Nepal currently is $20,000. For crew members, this amount is typically $40,000 per person.
By comparison, the Montreal Convention currently sets airline liability at up to $202,500 for passenger death or injury on international flights. The liability limit was last revised on December 28, 2024.
The convention follows a two-tier liability system. Under the first tier, airlines are strictly liable for proven damages up to $202,500 and cannot contest liability unless the passenger contributed to the injury.