Is how Drukair feels about Tashi Air vis-à-vis its plan to fly to Singapore 

Aviation: In an indication that the international sector is not big enough for two airlines, the national airline Drukair has recommended that private airline Bhutan Airlines (Tashi Air) reconsider its intention to fly to Singapore, on grounds that existing passenger demand is too low.

The private airline had requested the Department of Civil Aviation (DCA) to obtain rights for a route that would connect Paro and Singapore via Myanmar, as it was considering flying to the island state.

Drukair CEO Tandin Jamso said that he “strongly recommends” Tashi Air to reconsider its intention to connect to Singapore, as demand is not high enough for two airlines.

He pointed out that Drukair usually flies around 60-65 passengers, which is a 40-45 percent cabin load, during the tourist season.  However, during the off-season, as few as 15-20 passengers are carried, he said.

“Now, if Tashi Air starts to operate, we’ll be sharing these 15-20 passengers,” he said. “They’re going to lose, we’re going to lose.”

The CEO said that the national airline is already struggling financially on the Singapore route.

Drukair began flying to Singapore in August 2012.  It currently flies twice to the island state via Kolkata, India.

Tandin Jamso said that Drukair is already meeting whatever demand there is currently, and Tashi Air should wait until additional capacity is required.

He explained that both airlines are already losing on the Paro-Bangkok sector.  Both airlines operate daily services to Bangkok.  According to statistics maintained by Drukair, while seat capacity has increased one hundred percent with Tashi Air’s entrance, passenger traffic had increased only by 27 percent, as of October last year.

He added that the growth in traffic from Bangkok could also be attributed mainly to promotion discounts that had been introduced for both the local and Thai markets.  He said that, while passengers are benefitting, both airlines are “bleeding”.

Tandin Jamso also said that, if the aviation policy in Bhutan is to enhance tourism, then more gateways needed to be established.  He said that Tashi Air should take a lead role and establish different gateways like, for instance, Kuala Lumpur, so that the two airlines complement rather than kill each other.

However, Tashi Air CEO Phala Dorji, while agreeing that two small airlines should complement each other, disagreed that the private airline should not operate to Singapore.  He pointed out that, as a licensed Bhutanese operator, the private airline needed to sustain, and that initial market studies had shown encouraging results for a Myanmar-Singapore flight.  But Phala Dorji said the airline was still studying the viability of the route.

He also questioned whether Drukair would allow Tashi Air to enjoy a monopoly, if it risked opening a new gateway like Kuala Lampur, and the route turned lucrative. “If we’ve to look for new routes, does that mean Drukair isn’t going to operate on that route?” he said, adding that the national airline should assure Tashi Air that it would not.

Phala Dorji also explained that, for new gateways to be opened, the government first needed to establish an air service agreement with the respective country.

Bhutan currently does not have the permission to operate a flight between Myanmar and Singapore.  Discussions have been initiated to obtain permission from the Myanmar government, but it has been reluctant to grant it, reasoning that an existing right of two flights a week connecting Bhutan to Thailand via Myanmar is not being used.  The Myanmar government has said that it was, however, willing to consider a Singapore route, if the existing one was given up.

Tandin Jamso said that it would be a mistake to give up the existing rights, and that instead diplomatic means of obtaining the additional Myanmar-Singapore route be pursued. “We’d strongly disagree. We think that the government and authorities shouldn’t exchange whatever we’ve been granted,” he said, adding that it would be hard to re-obtain the rights.

He said that, while Drukair once operated to Myanmar, it had to suspend the service, as there was not enough demand between Paro and Myanmar, but that there was sufficient traffic between Myanmar and Bangkok.  He added that there is now potential for traffic between Paro and Myanmar, with the country opening up economically and to tourists.  He said that Buddhist tourists might look to combine Nepal, Bhutan and India in a single trip, and that there was an economic opportunity for both airlines.

But for that to happen, he said, the flight needed to end in Bangkok, as it was a main gateway to Bhutan.

Drukair is considering recommencing flights to Myanmar from next year.

Phala Dorji said that a joint sitting between DCA and both airlines be held to further discuss the issue.

DCA is yet to make a decision on whether to surrender the rights in exchange for Singapore rights.

By Gyalsten K Dorji