Phub Dem

The global airline industry is looking for a significant rebound in Spring and Summer with Omicron cases ebbing, the national airline DrukAir is preparing cautiously for the reopening.

According to international media, the global airline industry is “optimistic” about the outlook for air travel in 2022 as Omicron-related restrictions are either eased or completely removed.

The global airline industry remains the hardest hit due to movement restrictions. The challenges have continued ranging from new variants of the virus to shifting government policies on travel restrictions. The impact on customer confidence and airlines’ ability to plan and operate predictable schedules has severely hit revenues and finances.

According to the Ministry of Information and Communication’s annual statistical report, the total number of international air passengers to and from Bhutan in 2021 saw a decrease of more than 72 percent compared to 2020.

The International Air Transport Association (IATA) estimates say international air passengers in 2021 decreased by 60 percent globally compared to the pre-pandemic period (2019).

Bhutan saw a gradual increase in international air passengers from around 130,000 in 2010 to 370,000 in 2019. However, the number of passengers plunged to 50,382 in 2020, and the trend further decreased to 13,444 last year.

Drukair’s Chief executive officer Tandi Wangchuk said that it was difficult to predict when air travel would return to pre-pandemic levels amid the current pandemic.

Although countries are administering vaccines and easing the restrictions, he said that the road to recovery was unpredictable and might take some time to return to business.

“Many uncertainties are making it difficult to say anything definitive, although we are trying everything to remain prepared for new developments of any kind,” he said.

He added that even if countries allow international travel, passengers still need to check the latest entry requirements for travel. Unless the restrictions are eased, it might be difficult to forecast an increase in passengers.

With the easing of travel restrictions in Bhutan and other destination countries, Tandi Wangchuk said that the company looks forward to a resurgence of passengers excited for leisure and business travels.

However, he said it was essential for the company to remain alert as hygiene and safety standards will become more stringent, and digitalisation will transform the travel experience.

“For instance, mobile apps could store traveller’s vaccine certificates and test results.  We can only hope that air travel will become greener and more efficient,” he said.

The operating revenue of Drukair was reduced by 42 percent from Nu 966 million in 2020 to Nu 556 million in 2021.And the loss after tax increased by 36 percent from Nu 814 million in 2020 to about Nu 1.11 billion last year.

According to Drukair officials, the company projected revenue of Nu 1.349 billion and a loss of Nu 1.395 billion for this year.

Drukair adopted some austerity measures such as deferring leave encashment, strict monitoring of travel and daily allowance, and encouraging staff to take leave without pay and avail extraordinary leave.

Besides, the company also relieved expatriate captains starting January this year and negotiated other expatriate captains’ salaries. Drukair also discontinued the replacement of separated employees and has recalled station managers. “Employees decided to take certain percent cuts to discourage laying off staff in the lower-income groups,” Tandi Wangchuk said.

Moreover, according to the CEO, if the situation doesn’t improve or deteriorates, the company might resort to further pay cuts.

The paper could not get a response from Bhutan Airlines.