The government’s decision to  subsidise airfare from next month should increase visitors to Bhutan. The subsidy to the two airlines is aimed at bringing down the cost of tickets and attracting tourists round the year to promote Bhutan as a year-round destination.

Increase in tourists, as claimed, would have trickle down benefits to all those businesses that depend on tourism. At the moment, it is the hotel industry and small tour operators who are complaining the most.

While we wait for more international tourists to come  with the reduction in airfare, it is worth pondering why the government is subsidising airfare for the two airlines. How is the airfare discouraging international tourists from visiting Bhutan?  Is it one of the main reasons for the drop in tourist arrivals?

The two airlines are business entities. And as businesses do, can they not fix the airfare according to volume and profitability?  It is simple logic to adhere to the basic economics of demand and supply. Increase in airfare during peak seasons could cover the discount given during lean periods. That is how many businesses function.

The three-star hotels in the country are a good example. They are selling cheap, cheaper than some hotels across the border in Jaigoan. Today, as hoteliers try to stay open, they have offers even tempting for locals. For instance, some three-star hotels in Thimphu provide free breakfast and dinner for Nu 2,500. They will increase it when there is demand. During lean seasons, our five-star hotels come with packages to entice the locals to experience their services. The growing group of Bhutanese with disposable income find it tempting.

Meanwhile, the subsidy is only to bring down the international airfares to the SAARC airfare level. Those wanting to visit Bhutan from the SAARC region are also finding our airfares expensive. Many from the region want to visit Bhutan during lean seasons for pilgrimage, to see the snow-clad mountains and even experience a snowfall, but they find it expensive. Travelling by road is an expensive and a tiring option. 

With the availability of budget airlines, tourists from India fly to Bodh Gaya in Bihar or Bagdogra in West Bengal to travel by road. This option, we realised, has repercussions, of losing businesses to local tour operators across the border, or discouraging tourists because of the daily sustainable fee and the vehicle hiring charges.

Budget airlines in the region make profits from volume. Some are doing away with inflight services like meals, serving beverages and alcohol. A few shots of free  cognac on Druk Air is luxury. But not all drink or wants to eat the “free meal” whose cost had been built in the ticket. Options to buy and eat would reduce the huge waste of free meals served and bring down airfare. In our case, some destinations are not more than two hours of flight time.

Bhutanese who fly in and out for business, holiday and medical tourism too are wishing if airfare were cheaper. The number of Bhutanese travelling by air has increased manifold. It is not anymore only  civil servants or corporate employees going on study tours or training. The options are limited, especially when airfare is regulated.