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Drukair makes a record Nu 349M profit

Drukair Corporation Limited’s (DCL) profit after tax (PAT) amounting to Nu 349 Million (M) is a record in the company’s history since its first commercial operations in February 1983.

Drukair’s chief executive officer, Tandi Wangchuk, said that one of the major reasons for the record making profit was due to the increase in the aircraft utilisation. “As airline companies’ profit depend on aircrafts’ flight, there was an increase in the number of hours aircrafts flew.”

Before the increase, he said, on average aircrafts flew five hours a day, which was increased at the end of 2016 to nearly seven hours a day.

According to Drukair’s annual report 2017, it operated 4,903 flights, which carried 271,007 passengers last year. “The number of flights increased was about 11 percent from 2016, which is an increase of about 470 flights carrying 37,437 passengers.”

The report stated that “the increase in the number of passengers was due to increase in the number of flights operated and load optimisation wherein flights were strategically operated based on the demand and booking status.”

Tandi Wangchuk said that the carrying capacity of the ATR was also increased with technology. “Substantial reduction of tariff is another reason.”

In 2016, DCL generated revenue of about 100M. The PAT growth was about 250 percent from 2016.

However, the national airline is challenged with financial budget for the two aircrafts, which are yet to be received in 2019 and 2020. At present, Drukair has three airbuses and one ATR.

According to the report, Drukair has committed about USD 108M for the purchase of airbus A320 NEO.

Tandi Wangchuk said that the company is forming a customer service section and call centre under ground operations in 2018 to improve customer services which has been one of the airline’s weaknesses.

Airbus such as ATR-42-500 and airbus A319 had already visited engine shops. Last year, a total of about Nu183M was spent solely for the aircraft maintenance.

Tandi Wangchuk said that maintaining schedule of flights to domestic airports due to weather is another challenge. “As the government’s subsidy for domestic flights was only till May 10 this year, we are discussing with the government on whether to continue it.”

From November 11 last year, domestic flights to Yonphula and Gelephu continued with government’s subsidy after the airline companies could not operate regular flights.  “We believe that Drukair could continue with the domestic flights to Yonphula sustainably.”

However, flights to Gelephu, he said, hardly had a few passengers.

Drukair held 73 percent of the overall market share in the country last year. A dividend of Nu108M was declared for 2017 financial year.

While the cargo and excess baggage recorded a decrease by 12 and 20 percent respectively, the mail increased by 19 percent in 2017.

He said that the company is looking to increase safety, referring to the adoption of a more all-inclusive Safety Management System.

Apart from complete adoption of Bhutan Accounting Standard for preparing financial statements, the company was restructured, a new service manual was adopted and pay allowances were enhanced.

Ticketing services are made available through Bhutan Telecom counters across all dzongkhags in the country.

Drukair bagged Changi’s best airline marketing award last year for conducting marketing initiatives to promote Singapore route during 2016 and 2017.

The airline has plans to expand in two strategic places, east and west in the long run. 

“We recently availed the approval to operate from Paro-Guwahati-Singapore which may open north eastern part of India which is expected to add value,” Tandi Wangchuk said. 

However, in airlines it takes about six months to add a new route as it involves  marketing and planning.

Rinchen Zangmo  

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