Drukair will bring in a new ATR 42-600 aircraft in September to replace the existing ATR 42-500.
SAARC Development Fund (SDF) will finance 70 percent of the aircraft cost amounting USD 13M (around Nu 980M) at four percent interest rate for a period of 10 years. Drukair will finance the remaining 30 percent as its equity. The loan agreement was signed between the Drukair and SDF yesterday.
The company has sought for a sovereign guarantee which was signed between the finance ministry and SDF.
This is the first loan under the economic and infrastructure window of the SDF. SDF has three funding window, the other two being social window and micro, small and medium enterprise (MSME) window.
During the signing ceremony, Lyonpo Namgay Tshering said that the financing will open up opportunities for Drukair to explore additional routes within the region and enhance regional integration and connectivity.
The CEO of SDF, Dr Sunil Motiwal said the financing would help Drukair extend aviation connectivity with Bangladesh, India and Nepal and thus, providing economic connectivity and regional integration.
Drukair’s CEO, Tandi Wangchuk said that the new ATR will enhance safety, standard and services of the airlines. ATR 42-600, he said features a Glass Cockpit equipped with digital flight instrument displays. The aircraft is also equipped with sky vision, which aids the pilots navigate through the clouds with the help of infrared and real time GPS. This, the CEO said would help in reliable domestic flights since weather is the biggest factor leading to cancellation of flights in the domestic sectors.
However, the carrying capacity of the new ATR is same as the existing ATR 42-500. The number “42” in its name is derived from the aircraft’s standard seating configuration in a passenger-carrying configuration.
He added that this project complements plans and efforts of the national flag carrier in expanding and enhancing its fleet. An additional Airbus A 320 Neo will join the fleet in the first quarter of 2020.
The governor of Royal Monetary Authority, Dasho Penjore, who was also present at the signing ceremony, said that it was a historic moment for the government, SDF and Drukair towards promoting regional integration. He said that the ATR financing will help further increase tourist arrivals.
The SAARC Development Fund, since its inception in April 2010, is mandated to build regional integration and economic cooperation through project funding in all the eight SAARC member states.