Kathmandu: A fresh debate and controversy has emerged in Nepal’s aviation sector after the Nepal Civil Aviation Authority (CAAN) implemented a provision requiring foreign airlines operating in Nepal to appoint a General Sales Agent (GSA) on a mandatory basis.CAAN has introduced the requirement through an amendment to its regulations, stating that the measure is intended to facilitate the collection of aviation-related charges and fees. Although the Authority had previously established a system requiring airlines to make pre-paid payments for flight and landing charges, critics allege that the latest regulatory amendment was pushed forward primarily to benefit a handful of intermediaries and aviation businesses.

The decision has sparked concerns among aviation stakeholders, particularly as allegations have long existed that a limited number of well-connected travel and aviation companies have concentrated GSA rights for several international airlines in Nepal. Industry observers fear that the new policy could further strengthen the market dominance of these groups.According to aviation sector professionals, representation rights for foreign carriers such as IndiGo, Air Arabia, Malaysia Airlines, Kuwait Airways, and Thai Airways have already been concentrated among a small number of travel companies. Following the latest decision, President Travels has also secured representation for Qatar Airways, reinforcing concerns that airline representation is increasingly being controlled within a limited business network.This development has intensified accusations that the market is moving toward a form of “cartelization” rather than healthy competition. Stakeholders argue that when a single group or closely connected business network manages the GSA responsibilities of multiple airlines, it can create imbalances in ticket pricing, distribution systems, and market access.

“While GSAs are already facing allegations of granting ticketing authority only to select travel agencies and engaging in cartel-like practices, the Civil Aviation Authority has now reinforced the system through another circular making it mandatory,” said one travel industry professional. “This challenges the principles of a free and open market. The government has effectively remained a silent spectator.”Industry participants also question whether mandatory GSA appointments remain relevant in an era when digital booking platforms, airline websites, and mobile applications are increasingly enabling direct ticket sales. Critics argue that imposing mandatory GSAs adds another intermediary layer to the market, reducing competition and potentially increasing indirect costs for consumers.

Concerns are also being raised that, rather than promoting competition, the regulator has effectively strengthened a “licensed intermediary structure.” Aviation experts warn that unless the process of appointing GSAs is transparent, competitive, and governed by clear regulations, Nepal risks allowing the market for foreign airlines to become concentrated in the hands of a few business groups.“Once a single travel company controls a large number of airline representations, market concentration becomes inevitable,” one expert noted. “Such a situation weakens healthy competition and limits opportunities for other market participants.”The ongoing controversy surrounding Nepal’s GSA system has raised broader questions about the structure of the country’s aviation market, competition policy, and the role of regulatory authorities in ensuring a fair and competitive business environment.