In a bid to bolster tourism and welcome more Indian visitors, the Druk Air board is currently deliberating a proposal to slash airfares. While the board remains open to the idea, it’s anticipated that Druk Air will seek government subsidies to offset potential losses. This proposal comes in light of Druk Air already benefiting from government subsidies, making the matter a complex one. A final decision has yet to be reached, with ongoing discussions at the board level.
Across the tourism sector, a prevailing sentiment is that airfares to Bhutan are prohibitively high, acting as a deterrent for potential tourists. An official in the industry highlighted two key reasons behind the steep fares. Firstly, due to the challenging terrain and high altitudes, Druk Air planes can only operate at around 80 to 90 percent capacity, necessitating fare adjustments to compensate. Secondly, Indian tourists have been subjected to the same fares as international travelers, nearly doubling the cost for Indian visitors.
The tourism industry is advocating for a reduction in fares for all tourists, although there is a stronger rationale for lowering fares specifically for Indian tourists. Within Druk Air, however, there is resistance to reducing Indian fares, as profitability and return on investment are significant concerns.
Tourism industry proponents argue that the high airfares for Druk Air and Bhutan Airlines are discouraging tourism growth and effectively creating a duopoly rather than fostering price competition. There’s a belief that instead of competing solely on price, Druk Air should reduce fares to attract more passengers, ultimately restoring profitability and revitalizing the tourism sector.
Notably, some sources have pointed out that Paro Airport need not be limited to only Druk Air and Bhutan Airlines, suggesting that it could be opened up to other international and regional carriers if required. If Druk Air does decide to lower its airfares, there’s hope that Bhutan Airlines will follow suit.
Choedey Yangzom, General Manager of Norbu Bhutan, stated that in addition to the reduced Sustainable Development Fee (SDF), high airline fares pose another challenge. Even international tourists are facing increased fuel surcharges of approximately USD 200 compared to pre-COVID times. Yangzom emphasized that initiatives like Druk Air’s recent partnership with Turkish Airlines could enhance connectivity to Bhutan, but the reduction of airfares remains crucial. Tourists, especially Indians, are increasingly using alternative routes via Bagdogra and Jaigaon, benefiting tour operators there who directly engage with hotels and transportation services in Bhutan.
