KATHMANDU: Cabinet has approved a bill to be tabled in the Federal Parliament that would increase compensation for families of victims killed in domestic air crashes from US$20,000 to US$100,000.

The “Bill on Liability and Insurance of Domestic Air Transport Service Operators,” prepared by the Ministry of Culture, Tourism and Civil Aviation, aims to strengthen passenger rights and align Nepal’s domestic aviation liability framework with international standards, including the 1999 Montreal Convention.

Once enacted, airlines will be required to pay US$100,000 in compensation if a passenger dies or suffers fatal injuries during boarding, while onboard, or during disembarkation. The draft legislation also outlines airlines’ liabilities for passenger injuries, baggage loss or damage, cargo handling, flight delays, cancellations, and third-party damages.

The proposed law further requires airlines to issue tickets to every passenger, clearly disclose airfare components, notify passengers of flight cancellations at least three hours in advance, and provide alternative travel arrangements at no additional cost when possible.

The bill also introduces compensation provisions for lost or damaged baggage and cargo, while setting minimum liability coverage for third-party damages caused by aircraft accidents. The government says the legislation is intended to make Nepal’s domestic aviation sector safer, more accountable, reliable, and in line with international best practices.