3 April, 2008 - Despite losing Nu 142.526 million from the sale of its two old BAE-146 aircraft, Druk Air has managed to stay out of the red, for the second year in a row, by making a net profit of Nu 31.15 million in the 2006-07 financial year.
The total profit for the year was Nu 495.405 million before deducting taxes, depreciation and the losses from the sale of the old planes. In 2005-06, the national airline had made a profit of Nu 88.02 million.
The two old aircraft were sold for around US$ 3.5 million, along with an extra engine and spare parts. “Due to the good condition and maintenance of our aircraft, we got a very good international price, considering that in China these planes were being sold for US$200,000 a plane,” said Druk Air’s deputy managing director of finance, Rinzin Dorjee.
Druk Air corporation is now worth Nu 3.908 billion, down from Nu 4.048 billion in the previous financial year, and net losses have decreased from Nu 626.216 million in the previous year to Nu 595.062 million, bringing it a bit closer to achieving a positive balance after decades of losses.
“Our main avenues of returns are traffic revenue (ticket sales of Nu 1.030 billion), lease earnings (Nu 118.265 million) and other operating revenues (Nu 88.203 million),” said Rinzin Dorjee. The total revenue in 2006-07 was Nu 1.416 billion, up from Nu 1.332 billion in 2005-06.
In spite of soaring fuel prices, flight operating costs came down to Nu 546.53 million, compared to Nu 553.73 million in the previous year. Expenditure was also down in areas like lease expenses, commissions to travel agents and duty free shops. However, expenditure went up in areas like maintenance, employee benefits, passenger cargo service, marketting, and administration. An area of concern is the falling dollar, which has hit Druk Air with losses of Nu 21.29 million.
Of Druk Air’s funds, its total shareholder value is Nu 2.225 billion which, after deducting the two-decade long net losses, is valued at Nu 1.631 billion.
The corporation also has a Nu 507.16 million long-term interest-free loan from the government and government bonds worth Nu 1.769 billion. This brings the total assets of the airlines to Nu 3.908 billion.
These sources of funds of Druk Air are accounted for in Nu 1.045 billion in cash and bank balances and Nu 64.94 million in debts owed to it by others. It also has current assets worth Nu 19.104 million and inventories (office articles, etc.) worth Nu 118.888 million. The corporation has planes and other heavy equipment worth around Nu 2.806 billion, after deducting depreciation charges. There is also a deduction of Nu 161.73 million in liabilities. The books eventually balance out to Nu 3.908 billion in funds at hand and invested.
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