TRIBHUVAN UNIVERSITY

INSTITUTE OF ENGINEERING
THAPATHALI CAMPUS

A Case Study On Civil Aviation Authority Of Nepal.

Submitted by: Submitted to:

Santosh Kapri (076BME038) Dr. Er. KHEM GYAWALI
Saurav Kumar Thakur (076BME039) Assistant Professor
Sharan Shakya (076BME040) Thapathali Campus
Siddhanta Kishor Subedi (076BME041)
Subash Bhujel (076BME042)

1
 ACKNOWLEDGEMENT

We are indebted to all those who have helped us to prepare A Case Study On Civil Aviation
Authority Of Nepal. We would like to thank our teacher, Dr. Er. KHEM GYANWALI,
Assistant Professor , Institute of Engineering, Thapathali Campus for giving us valuable
suggestions regarding this case study. He has helped us in getting familiarization with the
objective of Organization and Management and providing us a platform for preparing the case
study. Without his tireless effort, this study would never have been completed successfully. Also,
we are very grateful to him for giving us the opportunity to accomplish the task, apart from the
theoretical knowledge only. Thus, it broadens our mind and we are able to deal with upcoming
future case studies as it serves as the base to rely on.
We would also like to express our deep gratitude to our families and friends in creating an
environment to accomplish this report. Without their love and affection, we would not be in a
state to submit this report.

THABME076
Executive Summary:

Civil Aviation Authority of Nepal (CAAN) was established as an autonomous regulatory body
on 31 December 1998 under Civil Aviation Act, 1996. If the existing challenges and problems of
the Corporation are not timely addressed, there is a danger of the air accidents and even
Corporation getting into liquidation. Case study research method was selected to analyze the
situation and the whole scenario of CAAN. Attempt was made to find out about CAAN’s
organization structure , personnel management, ownership, motivation, leadership and MIS. We
have mentioned some of the problems existing in the organization and also recommended some
suggestion.
 Table of contents

S. No. Topic Page No.

1 Introduction

2 Project Objectives

3 Vision

4 Aviation History

5 Organization Structure:

6 Forms Of Ownership

7 Manpower Planning

8 Recruitment And Selection Of Manpower 

9 Training And Development Of Manpower 

10 Job Evaluation  

11 Wages And Incentives 

12 Motivation

13 Leadership 

14 Management Information System 

15 Drawbacks: 

16 Problems: 

17 Suggestions And Recommendations : 

18 Conclusion

19 Reference List: 
Introduction:

The Civil Aviation Authority of Nepal (CAAN) is an independent civil aviation regulator. In
1957, the Department of Civil Aviation was formally established under the then Ministry of
Work, Communications and Transport of the Government of Nepal. The statutory regulations
regarding civil aviation were introduced under the Civil Aviation Act, 1959 (2015 BS). Nepal
obtained the membership of International Civil Aviation Organization (ICAO) in 1960.

The Government of Nepal introduced its first ever Civil Aviation Policy in 2050 B.S. (1993
A.D.). This policy made the provision of transformation of Department of Civil Aviation into an
autonomous Civil Aviation Authority. Accordingly, Civil Aviation Authority of Nepal (CAAN)
was established as an autonomous regulatory body on 31 December 1998 under Civil Aviation
Act, 1996. CAAN is the regulator of civil aviation as well as the service provider in the areas of
Air Navigation Services and Aerodrome Operations.

Project Objectives:
The purpose of this case study are:
 To understand the Collecting, Monitoring and Reporting Data of CAAN.
 To understand the personnel policies of CAAN.
 To know the Manpower planning of the organization.
 To understand the type of form of ownership of the organization.
 To know about the organizational structure of CAAN.
 To study the Selection Process.
Visions:
 Ensuring Safe, Secured, Efficient, Standard and Quality Service in Civil Aviation and
Airport Operations.
 To provide quality training to develop professional human resources for aviation industry
in Nepal and beyond in conformity with the ICAO provisions.
 For increasing the accessibility for mountainous region by providing service for regions
not accessible through other methods of transportation
 For helping the business sector by providing faster methods of transporting goods
 For supporting tourism and the recreational sectors
 To become an internationally recognized academy of excellence for the development of
quality human resources at the national and regional level.

Aviation History In Brief:

1949: The date heralded the formal beginning of aviation in Nepal with the landing of a 4-
seater lone-powered vintage Beach-craft Bonanza aircraft of Indian Ambassador Mr Sarjit Singh
Mahathia at Gauchar.
1950: The first charter flight By Himalayan Aviation Dakota from Gauchar to Kolkata. 1955:
King Mahendra inaugurated Gauchar Airport and renamed it Tribhuvan Airport.
1957: Grassy runway transformed into a concrete one.
1957: Department of Civil Aviation founded.
1958: Royal Nepal Airlines started scheduled services domestically and externally.
1959: RNAC fully owned by HMG/N as a public undertaking.
1959: Civil Aviation Act 2015 BS. promulgated.
1960: Nepal attained ICAO membership.
1964: Tribhuvan Airport renamed as Tribhuvan International Airport.
1967: The 3750 feet long runway extended to 6600 feet.
1967: Landing of a German Airlines Lufthansa Boeing 707.
1968: Thai International starts its scheduled jet air services.
1972: Nepalese jet aircraft Boeing 727/100 makes a debut landing at TIA. ATC services taken
over by Nepalese personnel from Indian technicians.
1975: TIA runway extended to 10000 feet from the previous 6600 feet.
1975: CATC established. 1976: FIC (Flight Information Centre) established.
1977: Nepal imprinted in the World Aeronautical Chart.
1989: Completion of International Terminal Building and first landing of Concorde.
1990: New International Terminal Building of TIA inaugurated by King Birendra.
1992: Adoption of Liberal Aviation Policy and emergence of private sector in domestic air
transport.
1993: National Civil Aviation Policy promulgated.
1995: Domestic Terminal Building at TIA and Apron Expanded.
1998: CAAN established as an autonomous Authority. ASR/SSR brought to operation.
1998: COSCAP-SA Project established. 2002: Expansion of the International Terminal
Building at TIA and the construction of a new air cargo complex.
2003: Rara airport (Mugu), Kangeldanda airport (Solukhumbu) and Thamkharka airport
(Khotang) brought in operation.
2004: Domestic operation by jet aircraft commenced.
2005: International flights by two private operators began.
2006: A new comprehensive Aviation Policy introduced. GMG Airlines of Bangladesh, Korean
Air and Air Arabia started air service to Nepal.
2007: Identification of site location for a new second international airport. Etihad, Dragon Air,
Silk Air, Orient Thai and Hong Kong Express commenced their service to Nepal.
2009: Establishment of RCAG station at Nepalgunjto augment coverage of VHF
communication in Air Traffic Control.
2010: SDR 44388000 was signed between Nepal Government and CAAN for the Capacity
Enhancement Project of TIA under ADB loan.
2011: Tumlingtar and Simikot runways paved. 2012: RNP AR Procedures for TIA effected
from June.
2012: CAA received TRAINAIR PLUS Associate Membership from ICAO A

ORGANIZATION STRUCTURE:
Form Of Ownership:
It is Public Corporation. A public corporation is that form of public enterprise which is created as
an autonomous unit, by a special Act of the Parliament or the State Legislature.

Features of Public Corporation:

(i) Special Statute:

A public corporation is created by a special Act of the Parliament or the State Legislature.
The Act defines its powers, objectives, functions and relations with the ministry and the

Parliament (or State Legislature).

(ii) Separate Legal Entity:

A public corporation is a separate legal entity with perpetual succession and common

seal. It has an existence, independent of the Government. It can own properly; can make

contracts and file suits, in its own name.

(iii) Capital Provided by the Government:

The capital of a public corporation is provided by the Government or by agencies

controlled by the government. However, many public corporations have also begun to raise

money from the capital market.

(iv) Financial Autonomy:

A public corporation enjoys financial autonomy. It prepares its own budget; and has

authority to retain and utilize its earnings for its business.

(v) Management by Board of Directors:

Its management is vested in a Board of Directors, appointed or nominated by the

Government. But there is no Governmental interference in the day-to-day working of the

corporation.

(vi) Own Staff:

A publication corporation has its own staff; whose appointment, remuneration and

service conditions are decided by the corporation itself.

(vii) Service Motive:

The main objective of a public corporation is service-motive; though it is expected to the

self-supporting and earn reasonable profits.

(viii) Public Accountability:

A public corporation has to submit its annual report on its working. Its accounts are

audited by the Comptroller and Auditor General of India. Annual report and audited accounts of

a public corporation are presented to the Parliament or State Legislatures, which is entitled to

discuss these.
Personnel Policies :
Personnel policies are the rules that govern how to deal with a human resources or personnel
related situation. They are guidelines to decision making that help keep the system as fair and
unbiased as possible.

To develop Civil Aviation Academy as an international training institute capable of delivering

trainings pertaining to all disciplines needed by CAAN together with the trainings of global
standard, as necessary, with the help of skilled indigenous and foreign instructors equipping
CAA thereby with the all necessary financial, human and technical resources as laid down by
National Aviation Policy

Arrangement shall be made for assigning employees on respective duty for minimum specified
time period on those functional areas of services for which he/she has been nominated and
trained by CAAN.

Manpower Planning:
Manpower Planning which is also called as Human Resource Planning consists of putting right
number of people, right kind of people at the right place, right time, doing the right things for
which they are suited for the achievement of goals of the organization.

Recruitment And Selection Of Manpower

CAAN being a government own organization, the process of recruiting of staff is carried out
under the supervision of public service commission (PSC) where examination are carried out
from three different levels concluded by screening candidates through a process of interview.
One may also be recruited by CAAN through a vender company. They also provide internship
for IT sectors.

Recruitment in positions like Drivers, Clerical staff in Miscellaneous Group under Technical
Service is done through out-sourcing as specified in CAAN Regulation on Employees Facilities
and Services Condition 2056 B.S (Including amendment). The total number of workforce under
this category stands at about 502. Essential skilled manpower/experts, if not adequately available
within the organization, then CAAN shall hire such adequately qualified man powers and
professional experts through outsourcing. Special remuneration package will be provided for
such manpower as per the approved procedure. Until the availability of such approved
procedure, hiring and remuneration package of experts shall be as approved by the CAAN
Board.

Training and development of manpower

1.Job entry /Indoctrination Training: As it will not be possible to cater the skilled manpower
direct from market in the developing country like Nepal, Civil Aviation Academy which is under
CAAN will select the qualified candidates among the graduates and undergraduates as
appropriate through free competition and provide the necessary training course in ATC
Licensing, Aerodrome Control, Aerodrome Flight Information (AFIS), Approach and Area
Control Course and Basic course in Aviation Fire Services.

2. Induction Training: Induction training is provided to all the freshly recruited employees .
Purpose of the training is to provide a general idea about the organizational traditions and
culture, relevant rules, regulation and act, air transportation, aviation security, aviation safety
including safety management system.

3. On-the-job Training: On-the-job training is provided to the newly entered employees after the
completion of the induction training and also to those employees who have to work in a new
environment including newly transferred employees as necessary.

4. In service Training: In service training is provided to those employees selected from various
service, group and subgroup who have completed at least 3 years of service.

5. Basic Inspector Training: This training will be provided to the employees involved in the
regulatory function as well as the service provision function of CAAN.
6. Inspector Certification Training: After completion of Basic Inspectorate Training, and
subsequent OJT in the regulatory functions will be provided with this training and after
necessary formalities will be accorded inspector certification by the Director General.
7. Service provider Certification Training: This training will be provided to the employees
providing service in the airports.
8. Recurrent /Refresher Training: Recurrent Training will be provided to the certified inspectors
and other designated employees as per the ICAO provisions to maintain their efficiency up to the
standard.
9. Refresher Training: This training is provided to maintain the proficiency of the employees.
10. Electro-mechanical Equipment Installation/Maintenance Training): Trainings for the
installation and operation of equipment under CAAN and its office.
11. ATC Procedural Control Training Controllers working at various ATS positions like Tower,
Approach, ACC as a procedural controller after the completion of Basic ATS Course but do not
have training on Radar Control shall be provided with this training.
12. Terminal RADAR Control Training For the controllers working in TIA, who have completed
training on procedural control and recommended for Radar Control Training by the concerned
Department.
13. En-route RADAR Control Training) Terminal Approach Controllers working in TIA who are
recommended for En route Radar Control from the concerned department will be provided with
this training.
14. Calibration Training This training is provided for the calibration of various communication,
navigation and surveillance equipment, meteorological equipment and equipment used for the
maintenance of related equipment.
15. Communication, Navigation, Surveillance and Security Equipment Training: Personnel
working on communication, navigation, surveillance and security equipment in CAAN and
airports under it will be provided this training.
16. ATS Message Handling Service Training: Technical Officers involved in Message Handling
Service of airport operation will be provided with this training.
17. Aeronautical Information Management Training This training will be provided to the
Technical Officers working in AIS Service.
18. Aerodrome Engineering: This training will be provided to all technical personnel under Civil
Engineering including overseers, engineer, and architecture.
19. Rescue and Firefighting Training: This training will be provided to those who have joined the
service after the completion of Basic Aerodrome Rescue and Fire Fighting Training. 20. AVSEC
Training: CAAN Personnel involved in Aviation Security will be provided this training.
21. Revenue and Tax Training: Topics including revenue, tax, financial policy, regulations,
procedures of tender & Etender adopted by CAAN and the government will be provided to the
personnel involved in Accounts and Revenue under financial administration.
22. Airport Operations Training: This training includes Airport Operation, commercialization of
airport, management of stakeholder, cargo management.
23. Administration/Management Training: This training is for the CAAN personnel involved in
airport operation and management.
24. Instructor Training Instructors of Civil Aviation Academy who have not obtained training
will be provided with Basic Instructor Training followed by Advance Instructor Training. In
process of transfer of knowledge and skill to CAAN personnel Train the Trainers Course will
also be provided as necessary.
25. Internal Audit Training: This training is for providing knowledge and information on
accounts procedures, accounts regulations including revenue, tax financial policy, regulation
procedures of quotations and e-tender adopted by CAAN and the government.

Job evaluation

Job evaluation is the systematic process of determining the relative value of different jobs in
an organization. The goal of job evaluation is to compare jobs with each other in order to create
a pay structure that is fair, equitable, and consistent for everyone. Wages are fixed appropriately
and fairly for different positions by CAAN themselves and those hired qualified manpowers and
professional experts through outsourcing, their wages are fixed vender companies.

Wages and incentives

Wages are fixed appropriately and fairly for different positions by CAAN themselves and those
hired qualified manpowers and professional experts through outsourcing, their wages are fixed
vender companies. CAAN provides bonuses to each employee based on their level and grades if
the organization is in profit.

Motivating

Maslow Hierarchy needs Theory

Physiological needs:
Physiological needs include food, clothes, shelter. CAAN helps fulfill the need of food by
opening cafeteria which provide delicious and nutritious food for employees. CAAN also
provide housing facilities to workers. CAAN also provide employees with living allowance ,
breakfast allowance, yearly uniform allowance ,transportation allowance etc.
Safety and security needs: Next is the need of security. For these, CAAN provide various
insurances such as full health insurances, unemployment insurances. It also has a provision to
provide pension for retired workers and Udaan for those who are fired from organization. CAAN
also provides with medical treatment expenses to employees.

Love and Belongingness:

CAAN provides services to the family members of member like some free flight for one
member .Also it gives compensation to bereaved family in huge amount if the employee dies at
work.

Self-esteem:
CAAN provides promotions and incentives based on the performance which will boost
the morale of employees.

Self-Actualization:
CAAN provides various training to employees, This helps worker to realize their full
potential. CAAN provides education(aviation related) leave to member.
Leadership
ER Pradip Adhikari is currently the Director General of CAAN.
Leadership is the ability of an individual or a group of individuals to influence and guide
followers or other members of an organization.
Leadership involves making sound -- and sometimes difficult
decisions, creating and articulating a clear vision, establishing
achievable goals and providing followers with the knowledge and
tools necessary to achieve those goals
CAAN has democratic type of leadership out of three different types
of leadership here there is Co-operation for attainment of goals. Here
the leader takes all the decisions and accepts full responsibility. The
leader of can must encourage the staff for active participation in
decision making.

Management Information System

Management Information System is the use of information technology, people, and business
processes to record, store and process data to produce information that decision makers can use
to make day to day decisions.
With advancements in technology, we can observe use of MIS in every industry and business
whether it’s to simply keep a record, collect data or process and analyse it to make decisions. In
this article, we’ll be understanding how it contributes to a smooth flow of process in the airline
industry.

After the adoption of Annex-19, ICAO has mandated that all of its member states implement
State Safety Program (SSP) and Safety Management System (SMS) in their aviation industries.
CAAN has established Safety Management Division within Civil Aviation Safety Regulation
Directorate for the effective implementation of safety management system. The Division is also
responsible to analyze the data received through mandatory information reporting system
(MIRS) and voluntary Information reporting systems (VIRS).
MIS in CAAN is in described in following points
 · To store basic data like passenger information, flight details, traffic flow between towns
and cities, record of add-on services and fares, flight schedules etc. (Flight Operation
System)
· To maintain and interpret important data like market share and profit margins to make
decision making process easier. (Pricing and Revenue Management System)
· To have records of revenues and cost to compare performance with the competitors or
with past years performance and find deviations. (Pricing and Revenue Management
System)
· To have records of all flights and their schedules for effective air traffic controlling.
(Flight Communication System)
· To have a record of all the employees (pilots, air hostesses, transport and luggage,
security guards etc). (HR management System)
· To keep track of luggage and belongings of the customers flying with the airline.
(Baggage Handling Systems)
· To keep track of boarding, check ins and landing of each customer in each flight and
coordinating the same to give maximum customer satisfaction. (Airport Management
System)
· To maintain all records of recent fares and discounts allowed to come up with marketing
and pricing strategies to survive in the competitive industry with strong competitors.
(CRM System)
· To keep a record of all the funds and their sources and their allocation and ensure
optimum utilization. (Finance System)
· To keep a track of expenses and ensure availability of resources like fuel, food, water, life
jackets etc whenever needed. (Flight Operation System).
To conclude, in the CAAN, MIS is not only used in the basic departments like Marketing,
Finance, Sales and HR like every organisation but also makes the operations flow smoothly in
the different stages of the service like airport checking in, baggage handling, flight operations,
flight communication etc to ensure that everything is coordinated and the all stages and parts of
the process are carried out smoothly and on time.
Drawbacks:
 Expensive safety equipment.
 Designation of an appropriate authority for aviation security.
 Due to lack of financial resources, it is difficult to have the staff involved in fire-services,
participate regularity in trainings, workshops, seminars in order to be aware about the
changes in technology as well as to keep them physically fit.
 Compulsion to operate and maintain airports and services regardless of the cost
effectiveness.

Problems:
 Appropriate placement and posting of qualified and trained manpower is not fully
exercised.
 Improper planning to train manpower and lack of identification criteria for training need.
 Budget isn’t available in time for Aviation researches.
 Mismanagement of available and donated resources.
 Political influence and Corruption in the system causing budget leakage.
 aviation accident due to not focusing on safety culture and safety climate at the
workplace of the aviation industry, airlines' poor leadership and safety culture.

Suggestions and recommendations :

 There is lack of co-ordination among the various departments of organization due to

which there is delay in providing effective services to the customers. So, there must be
good relation among the departments to provide fast and efficient service to the
customers.
 There should be the change in rules and regulations according to the environmental
changes and should be new technology according to the requirement.
 The employees are not punctual. So, the manager should pay their attention towards
employee behavior. To make the employees more motivated, there should be merit
ratings done to the employees
 Human resource department should look out for good talents that are coming out of
Universities and scout them to create qualified and trained man powers
Conclusion:
CAAN is Nepal’s only flag carrier that has been serving as the wings Nepali citizens for more
than a century helping Nepali people in the sector of transportation internationally and
nationally. Customers have perceived CAAN as the best aviation authority in Nepal.
We learned about personnel management, leadership, MIS and many other aspect of CAAN.
This case study was completed in short period where we collected data and information
and analyzed the available information. Based on those information we have recommended some
suggestion which could enhance its operation and facilities for the organization.

Reference list:
1. https://caanepal.gov.np/
2. https://caanepal.gov.np/storage/app/media/admin/CAAN%20HR%20Policy.pdf
3. https://canso.org/member/civil-aviation-authority-of-nepal-caan/