Drukair

Drukair BAe 146-100 at Paro Airport in 2005.

On 30 December 1987, a US$25 million order was placed with British Aerospace for a BAe 146-100 STOL regional jet.[16][17] The purchase of the aircraft was financed by the government, obtaining, for the first time in the country's history, a commercial loan.[18] In 1988, the airlines' operational base was shifted from Kolkata to Paro Airport and the airline also hired its first seven flight attendants who were trained by Thai Airways International.[13] On 21 November 1988, the BAe 146 was delivered to Paro Airport. With the introduction of the BAe 146, Drukair was able to widen its network to link Paro with Delhi on 26 November 1988, Bangkok on 28 January 1989 and Kathmandu in April 1989.[14] In the first full year of operational service with the BAe 146, the airline achieved an average load factor of 50–60 percent, more than the 40 percent which was expected, carrying 12,732 passengers over the 1989 – 1990 period.[14][19] In 1990, the runway at Paro Airport was lengthened from 1,400 metres (4,600 ft) to 2,000 metres (6,600 ft) and reinforced for heavier aircraft.[13][20] A hangar was also constructed for the aircraft, which was funded by the Indian government as part of the Paro Airport Development Project.[8]

The airlines' only aircraft was requisitioned by King Jigme Singye on 9 November 1990, in order to allow the king and his party to travel to Tokyo for the coronation of Akihito as Emperor of Japan.[21] From Japan, the King then travelled to Malé in the Maldives for the South Asian Association for Regional Cooperation summit between 21–23 November, and returned to Bhutan in order for the aircraft to re-enter service with the airline on 25 November.[21] Due to a requirement stipulated by the Bhutanese government that all foreign tourists, with the exception of Indian nationals, enter and leave Bhutan by air, the country's tourism industry was brought to a halt, which saw the airline paying hefty penalties to disgruntled tour operators.[9][21] This problem was somewhat alleviated when a second BAe 146 entered service in 1992,[22] and on 11 November 1993, the airline introduced a 10 Executive Class on the aircraft.[13] On 13 May 1991, Drukair was registered under the Companies Act of Bhutan.[13] Service to Yangon, the capital of Myanmar, began on 6 January 1997.[23]

Passengers who use Drukair flights between Kathmandu and Paro can gain viewing access to Mount Everest.[24]

During 2000–2001, Drukair could operate with only one single aircraft for over a year due to a corrosion defect in its A5-RGD aircraft in the wing tanks that was detected during a check at Woodford. The wings were replaced. In 2002, an RJ70 was wet-leased from airBaltic to cover for maintenance to A5-RGE.[25]

Drukair became the launch customer for the Avro RJX-85 in April 2000 when it placed an order with BAE Systems for two aircraft, with deliveries initially scheduled to take place in November 2001 and January 2002.[26] Delays in the first flight and certification of the RJX pushed back expected delivery to Drukair to after April 2002.[27] BAe Systems cancelled the RJX program in November 2002,[28] due to receiving orders from only two airlines,[29] Drukair and British European.[28] With British European threatening legal action to enforce their contract with BAE Systems,[30] the aircraft manufacturer offered to fulfil the contract for Drukair, although airline management decided against acquiring the aircraft, citing potential problems with sourcing spare parts for the aircraft in future.[29]

In order to find a replacement for the 2 BAe 146s, Drukair management fielded submissions from Airbus, Boeing and Embraer to determine their products' suitability to meet Drukair's stringent operational requirements. Bombardier was also invited by management to demonstrate the CRJ900 regional jet,[31] however, the airline was advised by Bombardier the aircraft would be unsuited for operations at Paro.[32] In February 2002, the Airbus A319 became the largest aircraft to ever land at Paro Airport, when Airbus demonstrated the aircraft to the airline. By October, Boeing had withdrawn from the competition due to not being able to source an aircraft to demonstrate to the airline. With the Embraer E-190 yet to fly, it was expected that Drukair would order the A319. However, the government had concerns regarding financing for the purchase, and in October the final decision was delayed.[33] After a short period of time, the government instructed management to begin evaluations once again,[32] and a Boeing 737-700 conducted eleven test flights at Paro Airport in February 2003, in which it was demonstrated it met the requirements of the airline for operation into Paro.[34]

Airbus signed a memorandum of understanding with Drukair in July 2003 for two 114-seat Airbus A319-115, powered by two CFM56-5B engines, for delivery in the second half of 2004.[35][36][37] The purchase of the two jets, valued at 3,534.36 million Bhutanese ngultrum (BTN),[16] was the biggest single purchase ever made by Bhutan, and was largely responsible for a 250 percent increase in the Bhutanese trade deficit over the previous year for the financial year 2004–2005.[38][39] The Bhutanese government issued BTN 1,767.18 million in government bonds to pay for one aircraft and for only the second time in Bhutan's history intended to seek a commercial loan for the other aircraft.[16][18] However, in October 2004 it announced it would instead seek a soft loan for this purpose.[16]

On 11 November 2003, the king's birthday, Drukair initiated services to Gaya, India.[40] Bodh Gaya, 10 kilometres (6 mi) from Gaya, is the site of the Mahabodhi Temple where Siddhārtha Gautama, the Buddha, reached enlightenment, and 30,000–40,000 Bhutanese make the pilgrimage every year.[41] Pilgrims have previously made the pilgrimage to Bodh Gaya via a 2–3-day overland trip from the Bhutanese border town of Phuntsholing, and Drukair management plans on acquiring 20–30% of this traffic,[40][41] although the airline had yet to record a profit on the route at of February 2006.[42] The following month, as a result of Royal Bhutan Army efforts to expel from Bhutan territory Indian separatist insurgent groups, notably the United Liberation Front of Asom and the National Democratic Front of Bodoland,[43] flights to Dhaka were suspended from 29 December in order to prevent insurgents from using Drukair flights to escape to alleged hideouts in Bangladesh.[44][45]

Druk Air Airbus A319 at Paro Airport

The first Airbus A319 arrived in Bhutan on 19 October 2004;[35] the date chosen after a Buddhist astrologer was consulted to ensure the aircraft arrived in Bhutan on an auspicious day in the Buddhist calendar.[16] Before entering service on commercial flights on 31 October 2004,[46] Drukair took their A319 on a country-wide flight in honour of the ascension of Crown Prince Jigme Khesar Namgyel Wangchuck to the Chhoetse Penlop.[16] The second aircraft was delivered by Airbus to Drukair in December 2004.[47] On 31 August 2012, Druk Air took delivery of a third Airbus A319.[48]

In July 2005, the governments of India and Bhutan signed a new bilateral air services agreement which increased the allowable number of weekly flights between the two countries from 12 to 49. In addition to destinations already served by Drukair, the cities of Mumbai, Chennai and Guwahati were included in their services agreement, with Bhutan being granted fifth freedom rights from several Indian cities to onward destinations such as Yangon, Dhaka and Singapore.[49][50]

Domestic helicopter service was inaugurated in November 2005,[51] in line with a resolution by the Council of Ministers in April 2001 which stated that domestic services should be introduced. Thirty heliports across the country were identified, and the introduction of services saw, for example, the 550 kilometres (340 mi) trip from Thimphu to Trashigang taking only one hour, instead of two to three days.[52] The Eurocopter Ecureuil helicopter operated by the Nepalese operator, Air Dynasty, had by January 2006 seen 30 hours of service, netting Drukair US$3,000 in profits.[51]

Flights to Dhaka, suspended since 29 December 2003, resumed on 23 October 2006,[53] and the airline was given rights to fly to Chittagong and Cox's Bazar by the Bangladeshi authorities.[54] The airline announced plans in July 2007 to start scheduled flights to Mumbai via Kathmandu from March 2008,[55] inline with the strategy of Drukair management to increase the number of Indian tourists travelling to Bhutan during the low season months of June through August and November through February.[56] These plans were put on hold in March 2008, due to Paro Airport not being able to handle night flights and the airline only being able to secure landing slots at Mumbai's Chhatrapati Shivaji International Airport at 3 am.[56] Plans for services to Hong Kong, Singapore, Abu Dhabi, Dubai and Sharjah were also shelved.[56]

The airline posted its first profit in 2007 of BTN 31.15 million.[57] The two BAe 146 aircraft were sold to Star Perú in October 2007 for US$3.3 million, and left Bhutan for Peru in November and December 2007.[58][59]

Drukair Airbus A319 and BAe 146 at Paro Airport in 2005.

Druk Gyalpo Jigme Khesar Namgyel Wangchuck on 11 November 2007 issued a Royal Kasho establishing Druk Holding and Investments Limited, a holding company which would manage existing and future investments of the Royal Bhutanese government. As a result, seven government-owned companies, including Drukair, had their ownership transferred from the Ministry of Finance to the newly formed holding company.[60] Incorporated on 13 November 2007, Druk Holding and Investments announced in December 2007 that given Bhutan's tourism industry being reliant on Drukair, the head of the government agency overseeing tourism development in Bhutan would become the chairperson of Drukair, and would be responsible for improving the performance of the national airline.[61]

In March 2008, Drukair introduced a new uniform for its flight attendants, consisting of a contemporary kira and tego.[62] The uniforms were introduced for the centenary celebrations of the monarchy, as well as the airlines own silver jubilee.[22] The uniform was chosen by way of a competition in which five Bhutanese fashion designers submitted entries, with the winner receiving a BTN 75,000 prize.[62] The textiles used in the new uniform were chosen via a competition which was jointly organised by Drukair and the United Nations Development Programme to promote the Bhutanese textile industry and culture.[63][64]

Although the government of Bhutan goes to great lengths to prevent outside influences from intruding on Bhutanese culture, Drukair is not immune to problems which affect the airline industry and the world community at large. In June 2008, citing hikes in the price of oil and the need to contain operational costs, the airline reduced frequencies across its network and announced an increase in airfares to offset the increased costs, whilst taking advantage of the lower cost of jet fuel at Delhi, Kolkata and Bangkok airports.[65] Due to its small network which is reliant on fifth-freedom rights,[66] Drukair regularly leases its aircraft to other airlines, such as Myanmar Airways International and Bangkok Airways in order to keep utilisation rates on its aircraft higher than they would under normal circumstances, whilst at the same time earning extra revenue.[66][67][68][69]

The airline was due to begin flights on 20 April 2009 to Bagdogra Airport in India, but had to delay the inaugural flight due to the lack of immigration and customs facilities at the airport.[70] The inaugural flight to Bagdogra Airport left Paro Airport on 18 June 2009, making Drukair the first international airline to operate into the airport. In Bagdogra, a ceremony was held which was attended by S. M. Krishna, the Indian Minister for External Affairs, and Lyonpo Ugyen Tshering, the Bhutanese Minister of Foreign Affairs.[71]

"My Happiness Reward" was launched by Drukair on 10 November 2014, in commemorating the birth anniversary of His Majesty the Fourth Druk Gyalpo Jigme Singye Wangchuck and in celebrating his enlightened and visionary philosophy of Gross National Happiness.[97]

The members of the program can accumulate miles corresponding to the distance flown on Drukair and the class of service availed. Accrued miles may then be redeemed for free air tickets (Happiness Reward Ticket), upgrades at airports (Happiness Class Upgrade) and other benefits. Drukair currently offers 3 tiers of membership: Silver (Basic tier), Gold and Platinum (the elite tier).