The Bhutanese Leading the way.
These days Druk Air is flying regular flights to the domestic airports in Bumthang, Gelephu and Yonphula but it is doing so for a loss.
It is not like the flights are empty as people are flying, especially to Yonphula, but the economics is not making sense.
The Druk Air Commercial General Manager Wangchuk Tshering said that the Yonphula flights is usually quite packed as the distance is longer by road taking two days to travel and so people and mainly older people financed by their children take the flight.
He said there are around 40 seats and usually around 25 to 30 seats are full with local flyers.
There are also regular flights to Bumthang which has less locals flying and so it is a mix of locals and tourists currently.
The GM said there are regular flights to Gelephu but there are not much locals flying with only 5 to 6 people flying at a time unless there are special flights to do with the Gelephu Mindfulness City project.
The GM said that the domestic airlines does not make profit from local passengers who are in fact subsidized. He said only if all 40 seats of a flight are full than the airline makes a marginal profit of Nu 13,000 per flight.
He said the only way the domestic flights can make profits is through the higher fare charged to tourists.
Currently, the domestic fare from Paro to Yonphula is Nu 6,511 one way and Nu 11,793 for a round trip. For a tourist, the fare is USD 229 one way and USD 403 for the round trip.
Currently, there are flights to Yonphula on Monday, Tuesday, Thursday, Friday and Sunday and from 16th May it will be on Sunday, Tuesday and Thursday.
The domestic fare from Paro to Bumthang is Nu 5,899 one way and Nu 10,720 for a round trip. For a tourist, the fare is USD 204 one way and USD 363 for the round trip.
Currently, there are flights to Bumthang on Monday, Thursday and Sunday and from 21st May it will be on Tuesday and Thursday.
The fare for Gelephu is the same as Bumthang and the flight is on Friday and Sunday but subject to change.
The GM said that the airlines tries to reduce its losses by combining the Yonphula trip with either Gelephu or Bumthang where passengers are dropped.
Apart from tough economics, Druk Air also has to contend with high altitude flying conditions which means it cannot carry a full load.
In the monsoon months of June, July and August there are frequent cancellations at Yonphula due to the weather like fog or strong winds and the plane at times has to come back all the way and land back in Paro airport.
The GM said their fares are regulated by the Bhutan Civil Aviation Authority.
He said for any airline to make money it either requires the large numbers or volume like India where airlines can operate on a low margin or have high yield passengers who can pay more. He said Bhutan lacks both.
With the current government promising five airports and doing a review it is a foregone conclusion that most of these will be loss making for the airlines.
Samtse has some potential but that is yet to be seen.
The GM said the same applies in international flights too. He said the fares of Bhutanese are subsidized and in reality, the airline only makes its profit from the higher fares for international tourists.
The ATR plane is still paying its loan and it requires two pilots and two airhostesses and other costs come through fuel, maintenance and spares.
The GM said the priority for Druk Air is to not only connect Bhutanese to the world but also provide safety, service and a standard.
