Drukair to receive subsidy of Nu 0.30 million per domestic flight

Should things go as planned, the national airlines, Drukair would resume its domestic flights to Gelephu and Yonphula by December this year.

The government in principle has decided to provide Drukair with a subsidy of Nu 0.30 million per flight to the airline.

Information and communications minister, DN Dhungyel, during the meet-the-press session on October 13 said that in addition to the subsidy, the government has agreed to provide Drukair with Nu 7.6 million as one time additional cost to cover the expenditure that would be required in establishing the office in Gelephu and Yonphula.

Following a proposal from the airlines through Druk Holdings and Investment (DHI), the finance ministry reviewed the proposal and in the interest of time to immediately operationalise the domestic air services to Gelephu and Yonphula, the decision was made.

With the completion of renovation and up-gradation works at the two domestic airports, the government had directed Drukair to resume its domestic flight operations to Gelephu and Yonphula thrice a week.

Considering the commercial viability of operating domestic flights, Drukair had proposed three alternatives to the government – finance the purchase of a new ATR-42 with an estimated cost of USD 17 million or provide subsidy to meet the economic viability gap of Nu 0.393 million per flight or provide one time establishment cost of Nu 7.6 million to facilitate the airline to set up equipment and offices at the two airports.

Lyonpo DN Dhungyel said that purchasing a new ATR couldn’t be considered which let to the decision of providing subsidy including the one time establishment cost.

“Although the current ATR has a seating capacity of 43, it would be able to accommodate only about 25 passengers. This is also because of the load penalty in an ATR aircraft,” said the minister. “Because of this reason, Drukair would definitely suffer loss in flying domestic flights.”

Lyonpo said that in order to subsidise the loss, the government has agreed on the proposal. He said that the finance ministry over the week would finalise the modalities for the payment. “Once it is finalised, which should not take more than a week, Drukair would take another month to resume its flights.”

The minister also clarified that the subsidy of Nu 0.30 million per flight would mean the ATR should cover Paro-Gelephu-Yonphula-Gelephu-Paro route.

About USD 6.9 million was invested in the upgradation and improvement works at the two airports. The Asian Development Bank funded the project.

Younten Tshedup | Trashigang

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply