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Nepal debate over scrapping “dollar fare” raises fears for local air prices
Under Nepal’s two-tier domestic airfare system, foreign passengers typically pay US-dollar fares priced two to three times higher than for Nepalis, and airline operators warn any change could shift costs onto citizens.
South China Morning Post reports a renewed debate in Nepal over whether to scrap the country’s “dollar fare” pricing for domestic flights after a minister said the government would target higher airfares to boost tourism and ease costs for non-resident Nepalis holding foreign citizenship.
The scheme is built on a two-tier airfare system, where foreign passengers pay in US dollars and operators say the prices are often two to three times higher than for Nepalis, varying by route and season. In April, Minister for Culture, Tourism and Civil Aviation Khadak Raj Paudel said plans to remove the higher fares would begin with flights to far-western Karnali and Sudurpaschim provinces before expanding nationally.
The proposal stalled amid a fuel crisis linked to the Iran-US conflict, and Nepal’s tourism ministry said there were no ongoing discussions at the time. Now, tourism stakeholders and airline operators warn that removing the policy could have unintended consequences beyond aviation, with potential knock-on effects for citizens.
South China Morning Post notes the debate has reignited over whether the policy change is feasible, given the earlier disruption from fuel pressures and the risk that pricing impacts could spread through the domestic travel market.