With most of the flights grounded by the COVID-19 situation since March after the travel restriction was imposed, the two airlines in the country have been counting losses in millions. And today, some employees are measuring the losses in job losses and pay cuts.
When coronavirus halted travel, both the airlines slashed its flight schedule and parked planes in hangers. And that was the easy part.
Now, with the peak tourist season coming to an end without a single tourist, the airlines have to again refund the travellers. The challenge the airlines have to embark on is strategising on sustaining the business.
Bhutan Airlines has recorded more than Nu 190 M in losses since March. With the financial loss, more than a hundred employees of Bhutan Airlines are either laid off or are on leave without pay since last month. Only 87 of employees are with Bhutan Airlines at the moment and the company had reduced the employee’s salary by half.
The airlines’ fleets according to the CEO, Phala Dorji are on freeze and there is no source of income for the company. The airline only flies when there is a demand for cargo or chartered flight.
The CEO said the company has also taken loans to pay the refund.
Similarly, Drukair, while accounting the first half of the revenue recorded a loss of Nu 314 M.
“Last year in 2019, we made a profit of approximately Nu 50 M and in the same period this year, we are already into loss of Nu 318 M but the first quarter this year was not that affected by the pandemic. We did a forecast for a whole year, and in 2019, we made a profit of Nu 343 M for the whole financial year 2019. So in 2020, we thought we would be making a profit of Nu 300 M. However, due to this pandemic when we re-forecasted our revenue, we are now looking at a loss of more than Nu 1bn,” said Tandi Wangchuk, the CEO of Drukair.
Before the pandemic, the airline operated more than five daily flights abroad, but the figure dipped to a few flights a week now.
Drukair operated only three flights to India through the Air Travel Bubble.
“We have completed three flights with a good composition of loads. However, looking forward when we look at the bookings, there are no much bookings and we don’t know whether we can sustain these bubble flights. We have cancelled a few immediate flights which are coming up because of the lack of people,” the CEO of Drukair said.
The airline is currently sustaining on loans from Banks.
“To operationally sustain is becoming a bigger challenge for Drukair. We have already got approval for a loan from BOB of Nu 1.5bn and as of today, we have used Nu 750 M to continue our operations including the payment to the employees. We have not laid off a single employee and we have not cut down the pay of any staff as of now. But moving forward this may not be sustainable. Now we have decided that from 1st of January 2021, we are going to let off the eight airbus expatriate captains,” he added.
Senior officers with Drukair, according to the CEO have proposed for voluntarily pay cut, which will be taken to board meeting. There are around 500 employees with Drukair.
In the depth of flight freeze, both the airlines seem unsure of their future but they are certain that their revenue would be low and wobbly for the next few years.
Sangay Chezom
