High flying

Yonphula

Domestic air services were formally launched yesterday, coinciding with our 104th National Day. Druk Air flew their ATR-42 from Paro to Yonphula to Bumthang and back to Paro. And Tashi Air’s Pilatus PC-12 flew from Paro to Bumthang and back. The lucky passengers in the inaugural flight included the Speaker, MOIC minister, Members of Parliament and senior civil servants.

So, after missing several ambitious deadlines, domestic air services have finally begun. Truth be told, I had my doubts. Having spent three years in Kanglung in the 1980s, as a student in Sherubtse College, I was all too familiar with the weather conditions in Yonphula. The Yonphula ridge, where the airstrip is located, seemed to be forever shrouded in mist. And when it wasn’t, strong winds seemed to stage a relentless attack on the ridge. Or it would just rain, continuously, for weeks on end.

But the government has done it. Domestic air services are now a reality. I’m happy. And I’m grateful that the government has succeeded in opening up Yonphula and Bumthang to air traffic. There’s no doubt that the air services to these areas will boost the economies of central and eastern parts of our country through increased tourist arrivals and investments in related areas.

So congratulations are in order, first and foremost to Lyonpo Nandalal Rai, the MOIC minister. Then to the Department of Civil Aviation. And to Druk Air. And Tashi Air. Domestic air travel is possible because of their hard work. Well done. And thank you.

Photo credit: BBS

Nu confidence

Bhutan airlines?

The government recently approved airfares for our two airlines. This is how the fares were reported in Kuensel:

Druk Air is charging USD 170 (single) and USD 340 (return) for Paro-Bumthang, while Bhutan Air will charge USD 250 (single) and USD 400 (return).

For Paro-Trashigang, Druk Air is charging USD 215 (single) and USD 430 (return). Bhutan Air is charging USD 350 (single) and USD 600 (return).

From Bumthang to Trashigang, Druk Air will cost USD 110 (single) and USD 220 (return), while Bhutan Air costs USD 150 (single) and USD 250 (return).

When I read the fares, two questions immediately came to my mind: why so expensive? And why USD?

The answer to the first is straightforward. The fares are expensive because operating costs are high. And unless domestic air travel becomes unexpectedly popular, both the airlines may incur losses, in spite of the government’s generous subsidies.

The answer to the second question is not so straightforward. Why, indeed, are domestic fares denominated in US dollars?

All goods and services in Bhutan should be priced in ngultrum. Unless, that is, we lack confidence in our own currency. And that shouldn’t be the case. Firstly, the ngultrum is pegged to the Indian rupee. And secondly, if air tickets were priced in ngultrum, foreigners would, anyway, have to pay US dollars to buy the ngultrums to purchase their air tickets.

Hard currency would come into the country in any case. So it may seem that there’s no difference whether foreigners pay for their air tickets in US dollars or ngultrums. Actually, there is a difference. If the tickets were priced in ngultrums, banks – and the Royal Monetary Authority – would automatically be more involved in the US dollar transactions and, as such, would also be better able to regulate the movement of foreign currencies.

But more importantly, we would demonstrate to foreigners, and ourselves, that we have confidence in our own currency. And that confidence is crucial for economic growth.

Photo credit: Kuensel