I am encouraged to learn that the slumbering colossi may finally be awakening from their extended siesta. Two days back, TheBhutanese newspaper reported that the DrukAir is looking at reducing airfares for the tourists visiting Bhutan. Thank God for small mercies - this should have happened more than two dozen years back - but Alas! we cannot help our sloth-like nature. But as they say in the comic books, it is never too late!
I have said this over and over and over again - that the DrukAir is required to operate under extremely disparaging conditions. Nature is its most stubborn opposition. Consider the class of aircraft they own and their fleet size - the pitifully limited number of routes they serve, and the massive number of administrative and support staff they have to employ. When you consider all these limiting conditions under which it was expected to operate - one cannot fail but ask the question:
Wasn’t it plain stupid to create DrukAir - and still hope that it will make profit?
NO!!!! it was not a stupid idea - what is stupid is the perception of the people - that it was created as an enterprise of profit - IT WAS NOT!!! As I have said many times in the past - beyond doubt, the DrukAir was created to make a statement – a bold statement of our nationhood!
Unfortunately the vision of its creators was twisted out of form - it was turned into an organization that exacted heavy toll on others who depended on it. Thus, as an organization of hope and pride - it failed the Bhutanese people miserably.
Sadly, if TheBhutanese is to be believed, there are signs that the accountant’s mentally still prevails within the DrukAir’s management, which is evident in the fact that they speak of “loss” and “subsidy” in the same breadth.
Subsidy is specifically provided by governments around the world to provide competitive edge to fledging local industries, to act as a fulcrum - to balance unfair competition from superior economies, as a counterweight to combat harsh and unyielding economic challenges, to heighten economic buoyancy, to prevent losses, to keep costs down so that ancillary industries can grow and prosper - to ensure that critical services are not discouraged due to challenges that are outside their scope and competence.
Therefore subsidy is not a loss - but a responsibility of the government. And, DrukAir as a critical service provider, it is deserving of whatever subsidy is necessary - to keep it afloat and to continue to serve the national interest.
If subsidies were to be considered losses, we should forthwith close down our schools and hospitals and the civil service - they all exist because they receive 100% subsidy from the state.
We have to remember that even the most competent economies of the world provide subsidy to some of their industries - transport sector being one of the highest subsidized sectors. Every year the European Union (EU) subsidizes its transport sector to the tune of €73 billion. Likewise, the transport sector in China receives government subsidy in excess of US$130 billion a year. Germany is routinely accused by their competing neighbors for continuing to operate their money-losing airports - but they continue to subsidize them - because that is a veiled way by which they can gain competitive edge over others.
The DrukAir is a critical transport service provider for Bhutan’s vital tourism sector. Thus, it is correct that the government should provide it subsidy - there should not be an iota of hesitation - so that the airline can help boost the country’s tourism business. It is the only way by which the DrukAir can keep their fares within the realm of sanity. Doing so will provide direct and indirect benefit to the country’s mortally maimed tourism industry and, consequently, to the society at large.
If the RGoB fails to rein in the DrukAir and their irresponsible ways, the corporation has the potential to destroy Bhutan's tourism sector, and cause irrepressible dip in the country's foreign exchange reserve.
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