Nepal on Tuesday rescinded the operation permit for Air Arabia to operate flights between Kathmandu and Kuala Lumpur, officials said amid concerns about what the competition would mean for Nepal Airlines, dpa reported.
The Civil Aviation Ministry said the deal with the United Arab Emirates-based airline had been scrapped following a directive from parliament's international relations committee.
"We have to follow the directive of the committee," Tourism Secretary Kishor Thapa said while warning there could be consequences: "The government will have to suffer if any problem arises from this."
The committee asked the ministry to revoke its decision to allow the Sharjah-based low-cost airline to operate flights between Kathmandu and Kuala Lumpur. The directive followed a request by the national flag carrier Nepal Airlines.
It said the ministry's decision would hurt its business, which was the most lucrative on the Malaysia-Nepal route, earning it 8 million rupees (106,700 dollars) per flight. The route is widely used by Nepalese migrant workers travelling to Malaysia for employment.
Air Arabia said Monday that it was preparing to operate six flights a week starting December 16. Air Arabia representative in Nepal said the flights would come into operation as agreed between the two countries December 2.
"We are not challenging the parliamentary committee's decision but simply following the law," The Republica daily quoted Air Arabia's Ravi Chandra Singh as saying.
Air Arabia currently operates flights between Kathmandu and Dubai and Doha.
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