While Tashi Air has requested for a two-year extension, Drukair has not made a decision on whether it will stay in the domestic market

Aviation: It is yet to be determined which of the two airlines will operate domestic air services.

The government, in April, decided that Tashi Air, must recommence domestic air services as per its initial agreement. The private airline was supposed to have re-started its domestic operations, which it suspended in June 2012, by October, last year.

The government also decided that both or either one of the airlines would have to begin scheduled operations to the recently opened and certified Gelephu domestic airport in Sarpang.

The airlines have also been told that they either fly to all certified airports or leave the domestic sector altogether.

However, Tashi Air has written to the government reiterating its requirement for another two year extension, which would see it re-enter the domestic market only in October, next year.

Tashi Air CEO, Phala Dorji, said that the airline is not looking to withdraw from the domestic market, it just requires more time to get ready, which includes looking for an aircraft, pilots and engineers, among others.

Information and communications minister, DN Dhungyel, confirmed that such a request has been made. “Whether the government will accept that request or not, we’ve not yet decided at the moment,” said the minister.

The government is still waiting for a response from the national airline Drukair. The national airline had earlier proposed that the domestic market be divided between Tashi Air and Drukair. The government shot down the proposal.

Lyonpo DN Dhungyel said that Drukair had also written to the government to confirm if Gelephu domestic airport was certified as per international requirements. This certification was issued last month. He said that Drukair has not yet communicated a decision on whether it will operate to Gelephu. He added that once a response is received, it will be studied by the Cabinet.

Like Tashi Air, Drukair is also required to commence scheduled operations to Gelephu by November, this year.

“Anyone of them or both of them, have to start by November,” said Lyonpo DN Dhungyel.

However, the government is in agreement with the two airlines that the domestic market is not large enough for one airlines, let alone two.

The minister explained why only one airline could not be chosen and provided a limited period monopoly, as requested by Tashi Air. He said that if Drukair had been chosen, the public would say that the private sector is not being supported or encouraged. If Tashi Air had been chosen, then the issue of agreements signed earlier with the airlines would be raised.

However, the minister said that he did not think that the two airlines would choose to compete in the small domestic market. “Later stage, of course they can make money, but right now to begin with, it’s not viable for two carriers,” he said.

He added that if both airlines still want to operate domestically, then the government may have to accept Tashi Air’s request for time, and allow it to recommence only after two-three years, and until then allow Drukair to operate to the domestic airports.

“We’re hopeful that one of them will come by November, maybe it will be Drukair only because they already have the plane,” he said. “If they feel that there is no market for two airlines, let it be done by one and let the choice be given (to the two airlines).”

Lyonpo added that a decision on which airline will operate domestic air services will be made unanimously, with the two airlines. He said that such joint meeting will be held once the government hears from Drukair.

Tashi Air had also requested a time extension to allow it to break even or achieve business sustainability on its international services. Phala Dorji said the airline was “bleeding everyday” on its international routes and that it is only because of Tash Group of Companies’ other businesses it is able to continue operating.

He pointed out that Tashi Air’s entrance into the international sector had benefitted travellers with lower airfares and that such competition should be supported.

“We’re waiting for a favourable response,” he said.

By Gyalsten K Dorji