Druk Air looks at reducing airfare for tourists

According to reliable sources, the Druk Air board is considering a proposal to reduce airfares for tourists and especially Indian tourists.

However, while the board is open to a reduction it is likely that Druk Air will ask for subsidies from the government to avoid losses as per its calculation. The matter is a bit tricky as Druk Air already enjoys subsidies from the government. A final decision is not yet taken though the matter is being discussed at the board level.

So far the common consensus across the tourism sector is that the air fares to Bhutan are too high for tourists and that is limiting the number of tourists who can come here.

An official said that airfares are high for two reasons. The first is that given the terrain and high altitude, Druk Air planes can never fly to full capacity but only at around 80 to 90 percent capacity which requires compensation and this has resulted in higher fares.

The other reason is that while the fare for international dollar paying tourists are around the same depending on jet fuel prices, the fare for Indian tourists was made the same as the international rate which almost doubled the prices for the Indian tourists.

The request from the Tourism Industry to Druk Air is for all tourist fares though there is stronger basis for a reduction in the fares for Indian tourists.

However, there is resistance within Druk Air even to reduce the Indian fares over the issue of profitability and return on investment.

The argument being made by the tourism industry to Druk Air though is that since its airfares, especially for Indian tourists are so high they are either not coming or if they do some then it is mainly via Bagdora.

The crux of the argument is that instead of playing the price game Druk Air should reduce its fares and play the volumes game of more passengers and that will make Druk Air profitable and also help revive the tourism industry.

The feeling within the Tourism Industry is that the high prices of Druk Air and Bhutan Airlines is strangling the entire tourism industry, and the two are operating as a Duopoly rather then competing with each other to bring down prices.

The Tourism Industry had earlier requested Druk Air to start flights to Mumbai but Druk Air said the route is not economical as it could result in empty flights and losses.

A source said that it is not true that only Druk Air and Bhutan Airlines can fly to Paro and legally it can be opened up to other international and regional airlines if required.

It is hoped that if and once Druk Air reduces its airfares then Bhutan Airlines will also be forced to follow suit.

Norbu Bhutan General Manager Choedey Yangzom said with the SDF reduced now the other issue is airlines airfares which are quite high. She said even for international tourists there is a fuel surcharge increase of about USD 200 dollars compared to pre COVID times.

She said at the same time efforts like improving connectivity like Druk Air’s recent deal with Turkish Airlines will be good and make it easier to come to Bhutan.

She said that it will be important to reduce airfares too as tourists and particularly Indian tourists are coming via Bagdora and Jaigaon benefitting the tour operators there and they deal directly with hotels and vehicles in Bhutan.

 CEO of Keys to Bhutan, Anan said that the Indian tourism market is picking up among the upper middle class and middle class, but the biggest issue for them is that the airfare is too expensive especially since unlike International tourists who come alone or travel in pairs, Indian tourists bring their family.

He said to avoid the high fares Indian tourists from Delhi, Mumbai, Kolkata etc are forced to fly to Bagdora where they end up spending a night and then have to come via Phuentsholing that is another night and again while going back they have to go via Phuentsholing which is another day and night lost.

He said the combination of booking directly online without the permit system and high airfares means that Bhutanese tour operators are getting bypassed when it comes to Indian tourists.

He said that Jaigaon tour operators now take the tourists and keep the rupees and they make extra money by selling the rupees in Jaigaon at the exchange rate and pay the Ngultrum to Bhutanese hotels and vehicles.

However, when Bhutanese go to Jaigaon they still have to pay the exchange rate while shopping in Ngultrum.

Anan said that before the pandemic around 70 percent of the tourists’ flight tickets were Indian tourists and 25 to 30 percent were international ones.

He said the high fare for Indian tourists does not make sense.