Wednesday, March 6, 2019

On The Wings Of The Dragon: Part II

One might wonder what was a minuscule Bhutan doing - entering the air transport business, and that too with one solitary, even more minuscule, 18-seater Dornier aircraft. Would Druk Air assist the country in the expansion of its foreign trade, through carriage of export cargo? With a payload capacity of less than 2MT??? Impossible! Did the airline hope to cash in on the burgeoning tourist arrivals? Not by a long shot - even two years after the commercial operation of the Druk Air began, the tourist arrivals  for the year 1984 was recorded at 1,900 persons. So then what was the reason for the start of the airline?

Not certainly for profits - it simply couldn’t be. The answer is simple: its establishment was necessitated for a purpose far greater than mere monetary gains. The airline was started to serve a national objective - to serve as a national flag carrier - as the country’s aerial ambassador - to strengthen national sovereignty - to make a statement of Bhutan’s nationhood. Since our territorial boundaries did not have a coastline, it was not possible for us to have a sea-faring vessel to fly our national colors over the international waters and spaces. Thus we choose to go with an airline to carry our national flag beyond our borders - to announce to the world that Bhutan exists as an independent and sovereign country - with independent territorial boundaries, a standing army, a national flag carrier, a national flag, a group of people, and a set of languages - the essential attributes of an independent state.

This assertion was vital. Just one year after his coronation, the Fourth Druk Gyalpo saw the state of Sikkim being gobbled up, unceremoniously. That brought clarity to what His Majesty must do – to save a kingdom for himself and his successors; to safeguard the continued existence of a nation state.

Bhutan’s first membership to an international body was to Colombo Plan - in 1962, followed by UPU in 1969. We became a Member of the UN system in 1971. Then followed IMF, the World Bank, and the SAARC in 1983. Then came the Nonaligned Movement, the Group of 77, ADB, the EU and host of others. Bhutan’s pursuit of international relations was relentless and dogged - so much so that by 1990 - nineteen years after being crowned King, Bhutan had membership to 119 international, regional, and special interest organizations.

It is clear that Druk Air was created as an apparatus of the state - to make a statement - not to earn profit. It just couldn’t make profit - not even now after 38 years since its creation. It is understandable - it simply does not have the economies of scale in its favor. Worst, nature is its indomitable adversary.

The following tell the tale.

The daily aircraft utilization rates in hours per day for US airlines in 2014, is recorded as follows:

JetBlue                 11.77
Frontier                11.45
United                  11.37
Virgin America 11.33
Southwest            11.01
Delta                    10.55
US Airways         10.01

As opposed to the above, what are the numbers for our own homegrown airline? - between 5 to 5.5 hours until few years back. Under the new management headed by Mr. Tandin Wangchuk, it is now said to be 7 hours – a quantum jump! But not enough - not by a long shot! Unfortunately, given the geographical setting under which the Druk Air has to operate, I am told that daily aircraft utilization rate of 7 hours is provably the best it can do.

But it is not just nature - the efficiency of Druk Air is further hampered by manmade calamities - of the most bizarre kind. Thus, given the adverse conditions prevailing, if ever the Druk Air makes a profit, IT WILL HAVE TO EXACT THE COST ON SOMEONE ELSE!

And that is exactly what is happening right now - the cost is being born by the tourism industry.

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