Civil Aviation Authority of Nepal (CAAN) and NAC signed commercial ground handling agreement on Friday. The signing of the agreement by two state agencies means NAC will provide ground handling services to all international airlines operating in Nepal, except Indian Airlines and Thai Airways.
The previous ground handling agreement had ended on February 11. Ground handling services include ramp services, passenger handling and cargo handling.
According to NAC Spokesperson Ram Hari Sharma, the agreement would be extended by three more years (five years in total) after NAC obtains the International Air Transport Association (IATA) Safety Audit for Ground Operations certification.
NAC collects around Rs 2 billion annually in ground handling charges from the international airlines.
As per the agreement, NAC will give 12.5 percent of the revenue generated from ground handling services to CAAN. Earlier, NAC had been providing 10 percent of its earnings to CAAN as royalty.
Though CAAN had mulled over allowing private players to provide ground handling services, it dropped the plan after NAC requested tourism ministry not to seize its biggest revenue generator.