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Why scrapping Nepal’s ‘dollar fare’ could leave locals grounded

A plan to make Nepal’s domestic flights cheaper for foreign visitors could end up making them more expensive for citizens, according to airline operators who…

By Samantha Johnson / July 15, 2026
A plan to make Nepal’s domestic flights cheaper for foreign visitors could end up making them more expensive for citizens, according to airline operators who warn against scrapping one of the country’s most contentious tourism pricing policies.

Under Nepal’s two-tier airfare system, foreign passengers must pay in US dollars for domestic flights, with prices usually two to three times higher than for Nepalis and sometimes more, depending on the route and season.

In April, Minister for Culture, Tourism and Civil Aviation Khadak Raj Paudel pledged to end the sky-high airfares to boost tourism and provide respite to non-resident Nepalis holding foreign citizenship who are also required to pay higher fares.

He told the Kantipur newspaper that plans to scrap the “dollar fare” would initially start with flights to the far-western Karnali and Sudurpaschim provinces – home to lesser-visited attractions such as Rara and Shey Phoksundo lakes and Khaptad National Park – before being rolled out nationally.

The plan stalled due to the fuel crisis linked to the Iran-US conflict and the tourism ministry said there were no ongoing discussions on the issue.

Nepal Airlines, the country’s flagship carrier, introduced the dollar fare in the 1970s. Photo: Shutterstock
Nepal Airlines, the country’s flagship carrier, introduced the dollar fare in the 1970s. Photo: Shutterstock

The proposal has since reignited a debate over its feasibility, with tourism stakeholders saying the repercussions could extend far beyond the aviation sector.

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