The finance ministry and the Druk Holding and Investments (DHI) will finalize Drukair’s domestic flight operations in the coming week.
As directed by the government, Drukair, through DHI, submitted four proposals to the finance ministry for the operation of domestic flights to Gelephu and Yongphula.
One was to finance the purchase of a new ATR-42 aircraft. But the government has turned down this proposal, stating it would cost the government heavily.
“A review team from the finance ministry stated that financing the purchase of ATR-42 at a cost of $17 m is out of question,” said Lyonpo DN Dhungyel.
The second and third proposals sought subsidy of about Nu 400,000 per flight to meet the economic viability gap and a onetime establishment cost of about Nu 8 m.
On these, the government has approved Nu 300,000 subsidy per flight and a budget of about Nu 8 m to set up equipment and offices at Gelephu and Yongphula airports.
The information and communications minister said the ministry is working on the modalities for the payment of subsidies.
“Even when it is ATR-42 that we have at the moment, it can carry only about 25 passengers because of the load penalty. So, to carry those 25 passengers, Drukair definitely will incur losses. To subsidize that, government has come up with subsidy, and the payment modalities are being worked out,” he said.
Once the subsidy is approved, Drukair is expected to start the flight operations within a month.
