Lockdowns, travel restrictions and strict quarantine protocols to contain the spread of COVID-19 led to an unprecedented loss in the aviation industry across all nations. Bhutan is no different, the Drukair, one of the only two airline companies in the country, has reported losing millions in revenue. And to help the company avoid layoffs, officer level and higher employees have volunteered to accept pay cuts till the situation improves. Drukair saw a huge decrease in the number of flights last year, incurring a loss of over Nu 1bn.
The airline borrowed Nu 1.5bn to pay its employees last year from the banks. With the situation of the Airline sectors still a long way from recovery, Drukair says the company’s sustainability remains in doubt.
Around 200 employees including foreigners volunteered for pay cuts starting last month to offset financial stress on the company.
“The highest-paid employees in Drukair are the pilots and engineers. Pilots and Engineers volunteered to accept pay cuts of 25 % from their gross. After that are the officer level, who are neither pilot nor engineer, they are taking 15% voluntary pay cut,” said Tandi Wangchuk, the CEO of Drukair.
The pay cuts for a year will save more than Nu 64 M.
“We will do a review at the end of 2021 and if the situation improves, pay cuts may not be required. But if the situation doesn’t improve or gets worse, then they might have to take further pay cuts,” he said.
The office is taking steps to cut costs by deferring leave encashment benefits and encouraging staff to take leave without pay or extraordinary leaves. They also recalled staff stationed in destination countries. The company let go of all the expat pilots last month.
Even with the development of the COVID vaccine, the airline is still sceptical of having flights as before.
“Our expectation is at some point in time, it may be possible to travel without quarantining if you have a COVID negative certificate and also a vaccination certificate. If this happens, then the travel industry can slowly pick up. However, even with the availability of vaccines, it really depends on the destination countries how rules and regulations they set up for entry into their country,” the CEO added.
The company had more than 5,000 flights in 2019. It is now expecting only around 1,500 flights this year. Drukair currently has almost five hundred employees.
Sangay Chezom
