The first flight is scheduled for National Day
Aviation: The national airline will respect the government’s directive and commence weekly flights to Gelephu from December 17.
“We’re going to operate,” Drukair CEO Tandin Wangchuk said. “We’re going to follow the government directive,” he added, referring to the government’s second instruction issued last week.
In April, the government issued an ultimatum to Drukair to either fly to all domestic airports, namely Gelephu airport or leave the domestic market altogether.
The airline had responded then, through the media, that it would continue to operate domestically but did not specify if it would connect Gelephu.
In May, the airport was certified by the Bhutan Civil Aviation Authority as fit for scheduled operations, which meant necessary infrastructure, equipment, and services, among others, were in place to permit scheduled flights.
The airline and Tashi Air subsidiary Bhutan Airlines, were informed by the Department of Air Transport of the airport’s availability.
The government initially hoped that Drukair would commence flights by November 11. However, this did not happen and since then the airport has only been used a few times by the Royal Bhutan Helicopter Services.
Drukair will now operate once a week to Gelephu from December 17, as a stopover or intermediate point on its lucrative Paro-Bumthang flights. The cost of a ticket to Gelephu is yet to be determined. However, it was pointed out that a promotional fare will be available for the first month.
Tandin Wangchuk pointed out that Drukair’s stand on domestic air services has always been consistent. “We’re a DHI (Druk Holding and Investments) company which is, in the end, a state arm,” he said. “If there are any government directives we will honour them.”
The CEO said that a government directive would override questions of the commercial feasibility of the sector.
Drukair commercial general manager, Ugen Tashi, said that the airline will operate its weekly flights to Gelephu even if its 48-seater ATR aircraft is empty. He pointed out that a market feasibility study had been carried out by Drukair but that it had not been promising. However, he said that the market or demand could grow as a result of scheduled flights being available.
With Drukair remaining in the domestic market, and Tashi Air required to recommence domestic operations by April next year, the two airlines will be competing in a small market.
Asked if the domestic market is large enough for the two airlines to compete, Tandin Wangchuk said the question raised another one on whether the international sector is large enough for two airlines. Tashi Air was allowed to introduce international service and compete with Drukair from October 2013.
He said that if competition in the international sector has provided value and advantages for customers then the same would apply for the domestic market. The competition in the international sector has led to a price war between the two airlines with both again offering 50 percent discounts and other benefits this winter. As a result, Drukair also experienced a loss in 2014 with seat capacity doubling but passenger growth not growing as fast.
He also questioned if any studies had been conducted to analyze whether the international and domestic markets were large enough for two airlines.
Gelephu domestic airport was inaugurated in October 2012 by the previous government.
The erstwhile Department of Civil Aviation was provided with a budget of Nu 225.3 million to construct the airport.
Meanwhile, a response is also expected from Tashi Air in regard to the government’s instruction to resume domestic operations by April next year.
Gyalsten K Dorji