Domestic Air Services 1 March, 2011 – Drukair has confirmed that it will enter the domestic air services market by a stipulated April deadline.
The national airline finalised its move into the domestic sector, following its board of directors meeting yesterday.
The chairperson of the airline’s board, Kesang Wangdi, told Kuensel that Drukair would “respond to the call of the government”. He pointed out that the government had selected both Drukair and Tashi group of companies’ Tashi Air, and that the national airline would be “letting down” the government if it did not enter operations.
In a surprise for both Drukair and Tashi, the government chose in December the two companies to operate domestically. According to the request for proposals (RFP) floated in July last year, only one company was supposed to have been selected.
Tashi had approached the government, expressing its concerns on the financial viability of such a move, earlier this month. With an untested domestic market, survivability of two operators was worrying the company.
This prompted the government to hold meetings with representatives of both companies. Following the meetings, the communications minister Nandalal Rai said that the government would not reverse its decision to see two operators in the domestic market. A Tashi representative chose not to comment until a further date.
“The board has considered all options,” said Kesang Wangdi, in response to whether similar viability concerns were shared by Drukair. “Viability is a concern for both airlines, it applies to Drukair as well,” he said. But he pointed out that tourist numbers are expected to increase. He added that the board saw the existence of two operators as “cooperation” rather than competition.
Drukair CEO, Tandin Jamso, also said that the domestic market is “uncertain” for the airline. He pointed out that, if competition is a factor, even the international sector could be of concern. “In the peak season we’re doing all right, but in the lean season, occupancy is below 50 percent.”
The CEO said that the airline is expecting to commence domestic operations by April. The national airline will be operating a twin-propeller ATR 42 aircraft for domestic and short haul international flights. “Drukair respects the RFP and will be guided by the RFP,” he said.
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