A Pertinent Question

This morning's issue of TheBhutanese newspaper carries the following intriguing story:

As numbers go, this is an amazing number …. Let’s do some maths:

9,084 Bhutanese flying off to Australia in ten months means that on an average a little over 908 Bhutanese would have had to make the journey by air – every month. That is not taking into account other Bhutanese travelers who would have flown out – for whatever purposes.

The question now is this:

How many of these Bhutanese travelers bound for Australia flew their own national flag carrier – the DrukAir?

I urge Tenzing Lamsang, who broke his story, to do a follow up story on the subject. For a reporter decorated with the Best Investigative Journalist of the Year Award (2025), I know that this is not going to be a man-bite-dog kind of story …. But I can tell you that he is likely to uncover something that simply do not gel – something that does not fit!

To encourage him, here is a lead:

Very recently a Bhutanese couple with a one-year-old baby had to travel to the UK. When asked, they told me that their travel route would be as follows:

Thimphu > Phuentsholing > Samdrup Jongkhar > Guwahati > New Delhi > London.

But why opt for such perilous, round-about travel route?

Why indeed????

Because nobody cares …..!!

I wanted to ask the Almighty God …. But I get the feeling that He is also a Bhutanese.

A Noble Dream Gone Sour

Yesterday (21st March, 2026), TheBhutanese newspaper featured a news report that caused me deep anguish - forcing me to renege on my resolve sometime back - not to ever think or write about DrukAir.

According to the article, the DrukAir had apparently attempted to hoodwink Gyem Gyeltshen – the husband and father of the mother-daughter duo tragically killed in the airline’s helicopter crash over three years back – the probable cause of which was determined to be, in the words of the newspaper, “human error of the pilot caused by management and relation issues.”

We will keep our share ....... and yours as well!

Gyem Gyeltshen turns out to be a person of extremely humble background – an illiterate Bjop from the remote highlands of Lunana, far removed from the hubbub of urban Thimphu – the playground of the rich, the powerful and the well-connected. An apparent non-entity, it would appear that DrukAir had decided that Gyem Gyeltshen could be trampled with at will, and any which way they liked!

No doubt, the DrukAir management was unmindful that as poor and hapless as he might be - Gyem Gyeltshen, by virtue of being a Bhutanese, is a legitimate and undeniable part-owner of the airline. Thus, at a certain level what the DrukAir did is an act of treachery and disloyalty. Even if that were not the case, at the least, the poor aggrieved fellow is deserving of the most basic human decency – some kind and comforting words …. and restitution that is commensurate with the extreme tragedy that has been inflicted him. Such a noble act on the part of the DrukAir management would have been deemed appropriate and in fulfillment of its corporate social responsibility - an unwritten requirement expected of every responsible organization doing business in the country.

For sure no amount of wailing will bring back Gyem Gyeltshen’s wife and daughter – they are forever lost to eternity. But the least the institution that is responsible for his pain and grief can do is treat him with dignity --- instead of attempting to rub salt to injury.

Is it too much to ask that Gyem Gyeltshen be treated fairly and in a just manner? Is he not worthy of receiving what is determined to be his just due? But it is clear that DrukAir won’t do it. Will our justice system step forward and do it for him? Isn’t there any other institutions in this country that can rein in this monstrosity?

For years, the DrukAir has been allowed to cause pain and failure to many hundreds of emerging businesses – hundreds upon thousands have been deprived of their livelihood because the airline company stood in the path of people’s progress and success. Their mindlessness has caused, and continues to cause, grave injury to the country’s lucrative tourism industry – the airline plays a major part in the ongoing failure that the country’s tourism industry is experiencing. And yet, they are allowed to continue to bleed the country – it is as if they were created for that very purpose.

But I am a living witness from day one of the airline’s creation in the early 1980s. Thus, I am fully cognizant of the noble, and singular, intention behind its creation.

The airline was not created so that it can gag the Bhutanese peoples’ spirit of enterprise - it was created to let soar the Bhutanese dream!

My Penultimate Article on DrukAir

This will be my absolute last article on anything related to DrukAir - No More Honking!

The American poet and educator, Henry Wadsworth Longfellow believed that "If you only knock long enough and loud enough at the gate, you are sure to wake up somebody." Poor fellow – obviously he did not meet any Bhutanese in his life time --- otherwise he would have known that the Bhutanese don’t – and even if they do, they would be nothing more than walking zombies – clueless, sightless, heedless and mindless!!

More than a year back, late Draksho Tsering Wangda called me up from Gelephu and said;

“Yeshey --- I want to take up the issue of the DrukAir with the Royal government – will you find time to prepare a background paper for me on the issue so that I have an understanding of the issues in their entirety?”

Thus, on January 3, 2024 at 7:50 AM (going by the meta data embedded in the MS Word document I sent him) I began putting together the following article which ran into all of 11 pages!!!

I do not know if he ever took up the matter with the RGoB … he never told me … and now he is no more 😢.

Not wanting to preempt whatever Draksho Wangda was planning … I decided not to publish the article on this Blog, or any where else. But few days back … a short conversation with a friend convinced me that I should publish it – because, the friend and I both agreed that it is not necessary that one’s endeavors will actually wake the dead – but for sure posterity will bear witness that I knocked and knocked and knocked ---- 19 times!!!

https://yesheydorji.blogspot.com/search/label/On%20The%20Wings%20Of%20The%20Dragon

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When & Why

It is accepted that the essential attributes of a sovereign state are some of the following:

1. Defined Territory

2. Settled People

3. Standing Army

4. A Government with control over its territories

5. A National Flag Carrier

What Is A National Flag Carrier?

In the context of international law and relations, a national flag carrier is either an aircraft or ship that flies the national flag of a sovereign state.

It is universally accepted that all ports of call or landings in host countries extend to national flag carriers’ preferential treatment and access to certain routes and markets. 

Simply stated, the global community will endorse a national flag carrier only if it is floated by a state that is accepted as wholly owned and administered by a sovereign state.

Creation Of DrukAir – Our National Flag Carrier

I believe that it is in this context that His Majesty the IVth Druk Gyalpo worked tirelessly for more than three years to establish our National Flag Carrier - the DrukAir. The laborious journey began in 1981. By 1983, DrukAir was finally able to start commercial fights, having cleared the many hurdles placed in the path of its creation and launch. At last, the last of the missing spokes in the orb of our nationhood was put in place.

DrukAir debuted with one unpressurised 18-seats Dornier 228-200 turboprop aircraft. The country’s only usable airport, in Paro, had an airstrip measuring less than one-and-a-half miles long. It can be said with certainty that in creating DrukAir, His Majesty the IVth Druk Gyalpo could not have harbored any lofty commercial aspirations - I believe that it was his way of making a statement of nationhood, an assertion of independence, an announcement to the world that Druk Yuel was an independent nation with the necessary apparatus of nationhood in place.

Over the years, the national carrier began to grow, both in fleet size and in scope and scale of operation. Today, the airline boasts of the following fleet of aircrafts:

The Bhutanese people’s investment in the airline runs into tens of billions of Ngultrum – that is pretty substantial for a country whose annual GDP is less than Nu.280.00 billion.

National Flag Carriers Around The World

DrukAir’s singular history raises the question: Are there other national flag carries around the world that serve the national interest over narrow commercial interest? There are - to name a few:

Britain’s erstwhile Imperial Airways, formed in 1924, was specifically created to provide air links between Britain and its far-flung empire. No profit motives here. KLM followed suit, providing air links to the Dutch East Indies. Belgian’s SABENA Airlines serviced the Belgian Congo. Air France’s predecessor, Air Union, flew to French colonies in West Africa. Profit-making was furthest from the minds of these governments.

The Malaysian government considered Malaysia Airlines (MAS) “an essential instrument in the nation-building process”. The carrier’s primary focus was in servicing domestic routes rather than international ones. At the time, the Malaysian government’s focus was in integrating different regions as one nation. Here too, profit was nowhere in the scheme of things.

All of these airlines were established not as institutions of profit but as instruments aimed solely at providing control, prestige and national integration. Of course, some were also created as state apparatus for espionage. For instance, during the Cold War era, the US government used flight attendants of the now defunct PAN AM, its unofficial flag carrier, to perform espionage duties. Mossad regularly used El Al, Israel’s national flag carrier, for the same purpose. KGB agents infiltrated the state-owned airline Aeroflot to carry out intelligence and counterintelligence activities. South African Airways was used by the Bureau of State Security for espionage work.

As these examples attest, whether for espionage or for connectivity, it is clear that national flag carriers were created solely to serve a national interest. Narrow commercial interests seem to be the least concern to the states that owned these carriers.

Destiny’s Lost Child

From all the above, it is clear that a national flag carrier exists because it fulfills a social and national mandate - far above and beyond narrow commercial interests.

DrukAir cannot be an exception. Indeed, our national flag carrier has every reason to remain an apparatus in the service of the nation, because of all the airlines named above, DrukAir is the only airline that is financially unable to operate as an entity of profit. It is simply impossible, unless it does so at the cost of the nation and the people of Bhutan – which is what it is doing now - with impunity.

Somewhere along the line, DrukAir got its priorities confused and muddled. Even while it was clear, beyond any doubt, that the country’s operating conditions were extremely hostile, the airline began to pursue commercial aspirations - an ambition that was, and remains, untenable.

Today, the airline stands resolute and unbending - chasing an impossible dream, adamant that it will stand its ground, mindless and uncaring that it is causing jeopardy to the lives and livelihoods of a few hundred thousand of its principal shareholders: the Bhutanese people. The country’s vital tourism industry lies crumbling and helpless, at the mercy of a near-monopoly that no one seems to have the power to control or manage.

Now we are told that the DrukAir has lost 80% of its market share to operators from outside the country. Not that they care – because it is not money out of their pockets!

I have always held the view that the DrukAir is not a commercial entity, but an essential service apparatus - like the Food Corporation of Bhutan (FCB), the Bhutan Post (BP), the Royal Bhutan Army (RBA), the Royal Bhutan Police (RBP) etc. But strangely, the airline has been misled into believing that it is a commercial entity with profit at the core of its existence. Unfortunately, despite its self-assigned mandate to operate as a commercial entity, the airline forgot the fundamental objective of a commercial enterprise: to generate profit!

The airline may have been allowed to fail in its most fundamental duty, through neglect and lack of stewardship. It may have caused other institutions that depended upon it to fail. It may not have contributed in monetary terms to the national exchequer. But one must admit that DrukAir has contributed in other noteworthy ways. It has unshackled Bhutan from the country’s landlocked isolation. It has given wings to the Bhutanese people to traverse the world beyond. It has validated Bhutan as a sovereign state.

All things considered, however, we have to accept that DrukAir cannot be mandated to make a profit. There is simply no way it can, unless it does so, as it does now, at the cost of our national interest.

Challenges To The Airline

Paro airport is located in a narrow valley boxed in by steeply rising mountain peaks. Located in a geographically complicated site, it is classified as one of the most challenging airports of the world. Only a few dozen commercial airline pilots in the world are certified to fly into and out of Paro airport.

The operating conditions are difficult. Depending upon the season, dipping temperatures and windy conditions, coupled with high altitude, impose limitations on the operating hours of the aircrafts. At times aircraft are able to haul only half of their carrying capacity. Flight diversions and cancellations due to adverse weather conditions are common. The myth is that DrukAir has a monopoly in Bhutanese airline business. But the reality is that no international airline operators are willing to come to Bhutan. If that were not the case, under the bilateral ATA/ASA agreement with countries where DrukAir flies, airline operators from those countries have the right to fly the Bhutanese airspace. But they don’t, because the passenger flow is minuscule, the operating conditions are extremely difficult, and the operating costs are prohibitive.

Network Of Domestic Airports

The country has three additional domestic airports that DrukAir serves: Batpalathang, Gelephu and Yonphula. Here, too, the situation is no better. Given the restrictive length of the airstrips in these locations, only small airplanes with minimal carrying capacity can be operated. 

To aggravate the situation further, none of these three airports is equipped with bowsers - specially designed truck-mounted tankers that deliver jet fuel to the aircrafts. This is an essential service that every airport must be equipped with. Gelephu airport does not have one. Yonphula airport does not have one, either. Batpalathang does have one, but it is said to be a leaky apparatus. Because of the leaky tanks, it is said that the aircrafts captains refuse to accept fuel from it, for fear that the fuel may be contaminated - a safety measure that cannot be compromised.

Consequently, since the start of commercial services, Druk Air’s planes have been required to carry tons of extra jet fuel for the return flight, rather than carrying passengers. Add to that the fact that the load is already less than half its rated carrying capacity, due to high altitude and unpredictable weather conditions. The result: extremely high operating costs and a flight schedule that is akin to the roll of the dice.

Given these compelling circumstances, the way forward is clear for the government and for the airline company: focus on up-scaling carrying capacity; expand route coverage, service, safety and security; work toward creating the enabling conditions for others to generate jobs and income. In other words, support the government and the tourism industry by rationalizing fares. What the airline cannot earn, the tourism industry will augment a thousand-fold.

Sadly, more than four decades since its birth, DrukAir is like a lost and misguided child by the wayside. It cannot take pride in the fact that it has served a national cause, nor can it claim to have filled the national coffers with abundant profit.

Standing In The Way Of Bhutan’s Potential

Bhutan prides itself as a tourist destination of choice. We talk of the many tourism awards we have won in the international arena. We boast about our pristine environment. We advertise our unique cultures and the magnificent fortresses that adorn our hilltops and cliff faces. We revel in our colorful festivals that leave tourists breathless. Yet, after sounding the drum beat for close to half a century, our annual tourist arrivals is less than 8% of neighboring Sikkim with almost the same tourist appeal as Bhutan. Sikkim recorded a whopping 1,321,000 tourists in 2023 – as opposed to Bhutan’s 103,000 for the same period.

In large part, DrukAir is responsible for this failure. As a critical transport service provider for Bhutan’s vital tourism sector, DrukAir has had a ripple effect across the broad spectrum of the business chain. When tourism is hurt, the repercussions are felt by the government through reduced tax collection and a drop in foreign currency earning. Beyond that, its impact is immediately felt by the hotel and restaurant industry, the handicrafts sector, the transport industry, the farming community, pony drivers, roadside trinket sellers - even the wooden walking stick fashioners at the base of Taktsang. As we all know, the tourism industry provides employment to the highest number of Bhutanese people, earns the highest foreign exchange and is among the very few net gain industries in the country.

Sadly, DrukAir has been negligent in its responsibilities. Coupled with the ill-timed Tourism Levy Act of Bhutan 2022, it has caused serious damage to the country’s tourism industry. While the Tourism Levy Act has been partially rectified, DrukAir and its exorbitant airfare continues to cause mortal damage to our vitally important tourism industry.

DrukAir’s fares are simply too high - to the point that potential visitors believe that they are being taken advantage of, because of the near-monopoly prevailing in the Bhutanese air transport sector. Prospective tourists are forced to choose competing tourism destinations such as Sikkim, Darjeeling and Nepal for their annual holiday trips.

Because of DrukAir’s unreasonably exorbitant airfare, more than 80% of Bhutan-bound Indian tourist traffic is diverted to enter overland through neighboring Jaigaon. Add to that the recent rule that tourists are not required to be hosted by a local tour operator, and the situation is wide open for entrapment by the operators across the border. Given the enabling conditions that have been created by exorbitant Druk Air fares and tourist traffic being forced to enter through Jaigaon, the following situations have developed:

1. Jaigaon operators have taken over business which otherwise would have been handled by the Bhutanese operators.

2. Bhutanese tour operators have become secondary players, even acting as mere commission agents for foreign operators. It is rumored that in some cases, Bhutanese tour operators conduct their entire business - from quoting the land cost to preparing the daily itinerary - then ask their Jaigaon counterparts to act as the official tour operator. This way the local tour operators do not have to pay tax on the business because all transactions are conducted in cash in the name of the Jaigaon operators.

3. In this situation, all tour payments are collected/routed through the principal operators at Jaigaon. This means that Bhutan-bound Indian rupees terminate their journey inside the bank accounts of Jaigaon operators. Payments to service providers within Bhutan - such as transport operators, hotels, guides, restaurants etc. - are transected in local ngultrums. This explains why Bhutan has seen a dramatic drop in the inflow of precious Indian rupees.

4. Since the business is unregulated and mostly handled by the Jaigaon operators, taxable tourism business turnover goes undeclared - resulting in a substantial drop in tax collection by the DRC.

5. Over time, the Indian rupees earned by the Jaigaon operators from business usurped from Bhutanese tour operators, are sold to the Bhutanese at a premium ranging between 3-10%, thereby devaluing our ngultrum that is officially traded at par with the Indian rupee. Even worse, unofficially traded Indian rupees are used to under-invoice imports from India, further impeding tax collection.

6. Arising out of the introduction of new way of doing things under the recently introduced Tourism Levy Act of Bhutan 2022, the $$ inflow has experienced severe dip - to such a level that now the RMA and the DRC is said to pretend surprise – rather they feign ignorance - as to why the $$ earning from the tourism sector has gone down so drastically. They know very well that the reason is that under the new rule, only the SDF of US$100.00 is required to be deposited with the DoI – balance amount needed to cover the cost of hosting the tourists – IS NOT REQUIRED to be remitted officially. This has enabled many tour operators to seek cash payments from the tourists, or their foreign agents – resulting in reduced foreign exchange inflow – in addition to loss of tax collection as a result of a large amount of tourism business being conducted clandestinely – in CASH and without any official record of business transection.

7. It has ushered in an era of immorality – it has created enabling conditions for guides, drivers and even police personnel to siphon off hundreds of millions of the monument fees collected from the tourists.

Additionally, at the third-country level, DrukAir’s high fares have caused the following situations to develop:

1. Loss of company business to competing airlines in the region.

2. Loss of revenue to the company through loss of turnover, because what business that can be had is being taken up by competitors in the region.

3. Diversion of Bhutanese tour operators’ business to competition across the border, because inbound/outbound tourists find it cheaper to fly the Bagdogra route and employ operators in Jaigaon instead of the Bhutanese tour operators who are going out of business for want of work.

4. Loss of hundreds of millions in foreign exchange, including third-country currency such as dollars. Because dollar-paying potential visitors find the air fare too expensive, they choose competing destinations such as Sikkim, Darjeeling and Nepal for their annual holiday trips.

Need For Shift In Policy

To my mind, it would be simple to make DrukAir a respectable organization: categorize it as a service organization with a mandate to provide social/national service. This will require the government to subsidize its capital and operations costs to some extent. This is necessary because, on its own, DrukAir cannot survive, unless it exacts costs on others, which is what it is doing - on the country’s tourism sector.

Need For Subsidizing the DrukAir

DrukAir is a critical transport service provider for Bhutan’s vital tourism sector. 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 DrukAir can keep 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.

In this regard, Bhutan would not be a unique case. Such subsidies are specifically provided by governments around the world to provide a competitive edge to fledging local industries; to balance unfair competition from superior economies; to act as a counterweight to harsh and unyielding economic challenges; to heighten economic buoyancy; to prevent financial losses; to keep costs down so that ancillary industries can grow and prosper; and to ensure that critical services are not discouraged due to challenges outside their scope and competence.

In this sense, subsidies are not a loss but a responsibility of the government. Because DrukAir is a critical service provider, it deserves whatever subsidy is necessary to keep it afloat so that it can continue to serve an important national interest.

If subsidies were to be considered losses, we should forthwith close down our schools and hospitals and the civil service. They exist only because they receive 100% subsidy from the state.

Not all enterprises that the state creates are profit-centric. In 99% of the cases, they are service-oriented, either required to engage in areas that are sensitive or required to perform a service that no commercial entities are willing to undertake. 

A case in point is the Food Corporation of Bhutan (FCB) - another state-owned enterprise of the RGoB. This organization is not expected to make profit for the state. Its existence is solely for the delivery of essential foods to remote and underserved locations where enterprises of profit will not venture. Through government subsidies, the FCB is expected to ensure food security by delivering essential foods at affordable prices. Imagine FCB trying to make a profit!

We have to remember that even the most advanced economies of the world provide subsidies to selected industries - the 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 a government subsidy in excess of US$130 billion a year. Germany is routinely accused by competing neighbors of continuing to operate its money-losing airports; it continues to subsidize them as a veiled way to gain competitive edge over others.

DrukAir’s Differential Pricing Policy

As if high airfare were not enough, DrukAir has adopted a strangely unfair differential pricing policy that discriminates between nationalities. It is not clear why this is beneficial. Given Bhutan’s strong ethical profile, it is important to treat every visitor as equal. We cannot be seen to prefer one nationality over the other.

Lower Fares For The Bhutanese

What is the logic behind lower fares for the Bhutanese nationals? It may be perceived to benefit the Bhutanese people. But as we can see, the Bhutanese flying the DrukAir are those who are rich and can afford to pay or, they are travelling bureaucrats on official business whose bills are paid for by the state. Needy Bhutanese people do not fly DrukAir - they take the bus. In my view, this is yet another example of the airline’s disservice to the country.

Preparing For Change

A direct initiative from the Throne, work on the upgrading of Gelephu airport has already started – slated to be ready within the next 4-5 years. The current airstrip is slated for massive expansion to accommodate larger aircraft.

This renovation opens up boundless opportunities for the DrukAir. Unfortunately, Gelephu International Airport is also likely to attract international competitors. Thus, DrukAir will need to dismount its high horse and prepare to beat the competition by being a step ahead to claim and retain market share. That forward-looking work cannot begin too soon.

Making A Case For Change

To summarize, I believe our leaders need to revisit the mandate of DrukAir in the clear light of day. Why has this national jewel been allowed to fade? How can we restore it to its original national purpose - and do so in the context of modern financial and commercial realities? How can DrukAir once again dedicate itself to a single and high-minded purpose: to serve the nation and people of Bhutan?

Let us begin the job NOW – before someone else steals our thunder – completely and irrevocably!

The National Flag Carrier Loses Out 80% Of Its Business Share To The Competition!

BREAKING NEWS!!!

The venerable Kuensel has finally found its voice - after suffering mumps for the past 60 years.

I am hugely encouraged! The following report by the Kuensel on the self-defeating foolishness of the DrukAir Corporation may be proof that the Kuensel is finally maturing into a responsible media house:

It is sad – and no less intriguing - that the Royal Government of Bhutan can continue to tolerate stupidity at this scale – in allowing the DrukAir to price themselves out of the market. Imagine, what commercial entity allows 80% of its market share to be usurped by the competition operating from outside their domain? And to think that they have a commanding position given that they are the country’s national flag carrier with advantages that their third country competitors do not have.

The country is ill-equipped to counter the long-term implications of DrukAir’s irresponsible behavior. The consequences of what they are doing goes far, far beyond loss of business; beyond the devastation they have already caused to the country’s vital tourism industry.

According to the Kuensel article, the DrukAir offers the reason that they are operating under conditions that are out of the normal. In other words, what they are saying is that they are justified in imperiling the lives and livelihoods of hundreds of thousands of Bhutanese people, as a consequence. That is a pathetic justification!

The benefit of tourism cuts across the entire spectrum of Bhutanese society. Some two years back, upon being invited to give a talk to the DeSuups who were being trained to be guides at the Phaduna Skilling Centre in Punakha, the following was one of the 33 PowerPoint slides I presented to the trainees:

ABTO puts the figure of licensed Tour Operators in the country at roughly 800. Sadly, a sizeable number of them have been driven to migrate to Australia and the US, in search of livelihood – one more is due to depart for Australia on coming Tuesday. The GAB puts the number of Licensed Tourism Guides at about 4,700. An official at the GAB tells me that today less than 700 of them have some semblance of employment.

If the superintendents and the management of the DrukAir has any conscience at all, they should know that they have played a major role in contributing to the bleak situation that is currently prevailing in the country’s tourism industry, in addition to the fact that their incompetence has resulted in rank outsiders to siphon away 80% of the market share that should have been rightfully theirs.

When it is clear that they are incapable of understanding the harm they are causing themselves ... it would be futile to expect that they would understand the consequences of their irresponsibility on the nation and the people of Bhutan.

Subsidizing The Wings Of The Dragon

The following is the state of affairs at the Druk Air’s ticketing counter in Thimphu yesterday: at the peak business hour of 11:08AM, of the ten service counters, only two of them are occupied. I can assure you that this is not a one-off happenstance – I was there day-before-yesterday as well – it was even worst – not even one counter was occupied.

Druk Air Thimphu's Ticketing/Reservation Counters

Any thinking person’s heart would bleed at such a wretched scene. Druk Air has near monopolistic grip over the air transport business in the country. By comparison, it has the largest fleet of aircrafts – it serves the widest network of domestic and international routes and, best of all, as the nation’s flag carrier, it has the assurance of the Kingdom of Bhutan’s sovereign guarantee backing it.

With all that going for it, why is the airline’s booking office looking like an abandoned wasteland (Sa Tong) in Trashiyangtse?

Simple: it got its priorities all missed up; the airline out priced itself out of the market. They drove their potential customers to their competing airlines in the region.

Druk Air is a national flag carrier - it has an obligation far greater than financial profit. Created as a symbol of nationhood, its roles and functions are distinct from those other run-of-the-mill public enterprises. Like the RBA was not created to fight a war but to secure our territorial boundaries, Druk Air was not created to make profit but to make a statement, and to give wings to liberate the Bhutanese people from the bondage of landlockedness. Sadly however, as time went by, the custodians of the organization got their priorities mixed up and the corporation became an organization that is akin to what the Indians have aptly described: Bandarong Ke Haath Mein Nariyal: Coconut In The Hands Of Monkeys.

But it seems like things are going to look up soon. Supposedly, His Excellency the Prime Minister Tshering Tobgay has invited the managements of the two national airlines to let him know how his government might help - if necessary - through subsidies - in order to help the airline companies keep their airfares within the bounds of sanity.

That is the way to go!

Finally, it would appear that realization is dawning on people who matter, that given the limitations imposed by the geographical make of our country, profitable operation of certain enterprises is not possible - unless the government provides them subsidy - in order that they can continue to provide certain critical services that is essential for the development of the country.

Government subsidies to the transport sector is not new - larger and more efficient economies around the world have been doing it, year after year. The European Union (EU) subsidizes its transport sector to the tune of €73 billion. Likewise, the transport sector in China receives a government subsidy in excess of US$130 billion a year. Germany is routinely accused by competing neighbors of continuing to operate its money-losing airports; it continues to subsidize them in a veiled way to gain competitive edge over others.

Remember, subsidizing critical sectors is not a cost to the government – in most cases it is a responsibility.

Druk Air is a critical service provider - on its back rides the all-important tourism industry. Bhutan's tourism industry's success, or failure, hinges on how responsibly the national flag carrier behaves. The government - the elected representatives of the owners of the airline - the Bhutanese public - have placed faith in their representatives to do their job. We are encouraged that the government is now attempting to  live up to its responsibilities.

Bhutan’s Culture of Mulling: Part I

It is incredible that the government is still “mulling” over the issue of the URGENT need for a major reduction in the fares charged by the DrukAir - a state owned air transport company that is single-handedly jeopardizing the country’s tourism business and, consequently, the livelihood of hundreds of thousands of Bhutanese people.

The DrukAir and how it is functioning is a living example why certain state apparatus should not be accorded autonomy - they tend to go against the state’s larger interests, in order that they are able to protect some private interests. The DrukAir is not only causing problem to heir own solvency, but their irresponsible behavior causes problem at many levels:

1. Loss of company business to competing airlines in the region - because they are priced too high compared to other players playing the field;
2. Loss of revenue to the company through loss of turnover - because what business that can be had – is being channeled to the competitors;
3. Diversion of Bhutanese tour operators’ business to the competition across the border - because the inbound/outbound tourists find it cheaper to fly the Bagdogra route thereby preferring to employ operators in Jaigaon - instead of the Bhutanese tour operators who are going out of business for want of work;
4. Loss of billions in foreign exchange: the Indian Rupee - because neither the airfare nor the SDF, or the tour payments are received in Indian Rupees because the Jaigaon operators pocket the inflow of Indian currency and payments to Bhutanese authorities and service providers are made in local currency; and
5. Loss of billions in foreign exchange: third country currency such as $$ …. Because the dollar paying potential visitors find the air fare too expensive – thus choosing competing destinations such as Sikkim, Darjeeling and Nepal, for their annual holiday trips.

It is truly mystifying why the DHI and the DrukAir and the RGoB are still unwilling to act - even after it is clear that the airline is all set to sink the country’s tourism business 10 ft. deep into the ground.

What exactly is the matter? I am beginning to wonder - something sinister is afoot! I mean even a kid of 10 years can understand that the surest way to sink oneself is by out-pricing oneself from the market. Why is the DrukAir doing it? And when one is operating as a near monopoly in a restricted market on whom depends a few hundred other institutions of commerce, it is evil that one should behave thus!

1. The Association of Bhutanese Tour Operators (ABTO) is not doing anything;
2. The Hotel and Restaurant Association of Bhutan (HRAB) is not doing anything;
3. The Guide Association of Bhutan (GAB) is not doing anything;
4. The Handicrafts Association of Bhutan (HAB) is not doing anything;
5. The Bhutan Chamber of Commerce & Industry (BCCI) is not doing anything; and
6. The Tourism Council of Bhutan (TCB) is not doing anything.

As a last resort, can we now appeal to the Parliament of Bhutan to do something about it?

Does the Parliament have the right to intervene when it is obvious that the country's economy is being desecrated by some irresponsible agency of the state?

Why We Have To Lose to Win

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.

Tinker Tailor Soldier Smuggler

Over the years, I have doggedly insisted that our national flag carrier - DrukAir - is a vehicle on which few hundred business entities must ride - for business and prosperity. Because it is a public interest apparatus funded by Bhutanese public money, it must accept a responsibility that should transcend profit making. Whether pronounced or otherwise, the organization and its bosses cannot, in fact they must not, fail to recognize the social mandate that is intrinsic to its very being.

Sadly the carrier has failed the government and the Bhutanese people, miserably.

Yesterday morning a friend sent me some images of the vastly unfilled interior of the cabin of yesterday’s DrukAir flight KB153 - from Bangkok to Paro. Accompanying the images was the following partial passenger manifest of the flight, numbering a total of about 30:

Mix-And-Match: a Cabinet Member, a Professor, a failed business entrepreneur and three smugglers make up the passenger list of DrukAir

One does not have to be an Einstein to deduce that despite their insanely high fares, it is unlikely that the DrukAir is able to generate enough revenue to pay for their operating costs. Infact, we have seen that it has had exactly the opposite effect - it has succeeded in driving away thousands of potential passengers to competing airlines in the region - in the process driving the country’s tourism industry into the ground.

The thing with the national flag carrier’s irresponsibility is that the problem does not end or begin at their doorsteps - its ripple effect is felt across the broad spectrum of the business chain. It impacts Bhutan’s most vital industry - the tourism industry. When tourism is impacted, its effect is felt by the government: through reduced tax collection, and fall in foreign currency earning. Even beyond that, its impact is immediately felt by the hotel & restaurant industry, the handicrafts sector, transport industry, the farming community, pony drivers, roadside trinket sellers - even the wooden walkingstick fashioners at the base of Taktsang. As we all know, the tourism industry provides employment to the highest number of Bhutanese people, earns the highest foreign exchange and is among the very few net gain industries in the country.

To rub salt into the gangrene, the government’s recent tourism regulations that did away the requirement for tourists to come through local tour operators, has helped drive away a large segment of the tourism business into the waiting laps of the Jaigaon operators, with the net result that the Bhutanese operators are now no more than commission agents to the operators in Jaigaon. Bhutanese Tour Guides are reduced to lining up at the doorsteps of the Jaigaon operators - for business and employment. Or, they have been forced to take flight to destinations such as Australia or Canada.

Clearly those who are in positions of power and authority are being both negligent and irresponsible, that a single institution is allowed to inflict so much ruin and misery to others who have no choice but be at their mercy.

The question that begs to be asked is: If the Druk Air is not serving the national interest, whose interest is it serving? Is the organization being run and managed by a lot of do-gooders with misplaced allegiance? One has to begin to wonder!

You Found The Donkey - Now Find The Load

The KUELSEL reports in their today's newspaper that the DrukAir has established an interline arrangement with the Turkish Airlines, with the stated objective of handling passengers and their baggage.

The meaningless alliance

How nice!! Now only thing that remains to be seen is - from where will the passengers and baggage come? The answer is obvious:

J A I G A O N

Without doubt the DrukAir’s next stop in their quest for better management of passengers and baggage should be - Jaigaon. Because, given the RGoB’s enabling policies, coupled with the DrukAir's exorbitant ticket costs, the tourism operators in Jaigaon currently hold complete monopoly - total cast-iron grip over Bhutan's tourism business - atleast from Bhutan's highest potential tourism market - INDIA.

Enterprise Of Epic Tragedy

My connection with the DrukAir dates back to the very start of its birth in 1981. I have the honor of having contributed to its graduation - from a tottering fledgling to a full-grown swashbuckler with international reach and spread. Even before the airline started its commercial operations, at the request of its first Calcutta-based Regional Director P S Joseph, I volunteered to fly, multiple times, their first aircraft on its many dangerously unsafe test flights between Paro and Calcutta. I even got my personal cook and my office peon and the gatekeeper to ride the aircraft - to make up the load - in order that the airline may test the airplane’s carrying capacity, and maneuverability, under diverse weather conditions and emergency situations. Much later, when the company started their commercial operations in 1983, I was among the most frequent flyers - so often that Christopher Francis, one of the earliest officers of the DrukAir declared me CIP - Commercially Important Person.

A national liability

I never thought that I would live to see the day when the state would use the same airline company as an apparatus to cause pain and grief to the very people and institutions that it was created to complement and assist. Few would have any idea of the pains and tribulations the creator of the airline - His Majesty the IVth Druk Gyalpo - went through before he was able to establish the National Flag Carrier.

I can truly commiserate with the DrukAir - if they are unable to make profit from their operations. No one can deny that they are faced with insurmountable challenges posed by nature, including the fact that achieving economies of scale is near impossible given the realities of our smallness. No sensible person with any brain can fail to accept that there are certain challenges that are beyond human competence to surmount.

I keep repeating over and over that the DrukAir was not created as an enterprise of profit. But the managers at the DHI simply cannot get the message. Sadly, that is the peril of entrusting the affairs of corporations in the hands of bureaucrats with no corporate culture or training, let alone business acumen.

DrukAir is a national institution behind which thousands of millions of public money has been spent. The least it can do is try and work towards serving the interest of the industry and the people in whose service it was created. Sadly today there does not seem to be a single person in this country with the wherewithal to see the destruction the airline is causing the people of Bhutan.

I wonder if the DrukAir is generating enough business - I repeat business, not profit - to enable it to make its monthly loan installments and the annual insurance premium on their aircrafts?

If the DrukAir is making claims that it is making profit from its operations, it has got to be at the cost of others. It should not be acceptable that for the profit of one institution, hundred others are forced to suffer. If this has been the case, clearly they are a burden to the state and the people of Bhutan.

The people of Bhutan do not need any further proof that the DrukAir is instrumental in large-scale diversion of business to others across the border, even while their own brethren are suffering, for want of opportunities. If that were not enough, it is also apparent that they have directly contributed to the drastic fall in the inflow of hundreds of millions of foreign exchange. And yet, they remain adamantly blind to the folly of their misadventures.

Look at the images of the following hotels that are among our shiniest and brightest - behold the look of gloom and darkness they wear today. Every time I pass by these hotels - my heart bleeds because they should not be looking so forlorn and gloomy. Bhutan is touted as a preferred and prize-winning destination for tourism. If that were true - these bastions of tourism should be shimmering and sparkling like a trillion stars in the night sky. Tens of thousands of tourists should be jostling for space and accommodation.

Ariya Hotel

Dorji Elementts

dusitD2 Yarkay Thimphu

Hotel Druk

Hotel Tashi Yoedling

Hotel Thimphu Towers

Le Meridien Thimphu

Norkhil Boutique Hotel & Spa

Pemako Thimphu

ThePema by Realm

Thimphu DeLuxe Hotel

The above images were shot during late evening to show the occupancy status of each of the hotels. They were shot between 23rd to 25th July, 2023; 07:12PM to 08:53PM. There were some hotels where not even one room was lit up - in difference to the sentiments of the property owners, I choose not to show them here.

From what I hear, the government is yet again contemplating another deferment of repayment of outstanding loans. That is so terribly unfair to the people of Bhutan - such a move will actually aggravate the problem even further - not solve it. Over time such mindless acts will be the cause of the collapse of the financial institutions. When that happens, it will not be the financial institutions - but the common men in the street who will lose their life’s savings.

The day may not be long in coming when the financial institutions may be left with no other choice - than to write off all the outstanding loans - and claim their dues from the Royal Government of Bhutan and the DHI/DrukAir - because they willfully and forcibly engineered the ongoing disaster prevailing in the country!