Nok Air gets serious about turnaround

January 3, 2020 FacebookTwitterLinkedInGoogle+ Blog,NokAir

Mr Wutthiphum says Nok Air will avoid price wars and popular routes.

Nok Air, a loss-ridden budget airline, has pledged to implement plans to revive its business, increasing income and overhauling flights to prevent delays that have damaged the carrier’s image.

The turnaround is set to start in the final quarter this year, said chief executive Wutthiphum Jurangkool.

He said apart from airfare, the airline plans to create additional revenue from value-added services by partnering with tourism operators such as hotels, car rental companies, department stores and tour agencies on domestic routes.

To prevent flight delays, Mr Wutthiphum said the airline has invested in a home-based stock worth 100 million baht at Don Mueang airport to install spare parts for immediate use if needed. Spare parts from abroad take around three days to reach Thailand, which is the main reason for the delays, he said.

“Nok Air’s home-based stock will not only speed up maintenance work, but also reduce maintenance expenses by 30% in the latter half of this year,” said Mr Wutthiphum.

Rearranging flight schedules and adding spare aircraft to stand by in the morning or busy times should also help avoid delays, he said.

“Even though the airline will reduce flight numbers and income by operating with only 22 aircraft, we must fix this urgent problem,” said Mr Wutthiphum.

He said the airline is set to increase aircraft utilisation from red-eye flights to international destinations, aiming to use them for 12 hours of operation in the fourth quarter, up from 10-11 hours.

In November, the carrier plans to launch a Bangkok-Hiroshima route. On Sept 21 it added a flight from Bangkok to Guwahati in Assam state, India. Other second-tier cities in China will be added to the airline’s expansion plans, said Mr Wutthiphum.

He said Nok Air will not open new international routes to popular destinations to avoid price wars with other airlines.

The Jurangkool family is the major shareholder of SET-listed Nok Airlines, holding about a 52% stake, while Thai Airways International holds 15.94%.

Nok Air’s cabin factor stood at 88% in the first half this year, down from 91% year-on-year because of a lower number of aircraft, from 28 to 22. The reduced fleet saw lower volumes of flights and passengers in the second quarter by 10.3% and 8.18%, respectively.

Mr Wutthiphum said Nok Air expects to expand its fleet with two new aircraft this year and at least two more in 2020.

Nok Air reported a loss of 470 million baht in the second quarter, down from a loss of 742 million in the same period last year, and a net loss of 751 million for the first six months, down from a loss of 774 million year-on-year.

On Thursday, the budget airline announced a partnership with Bangpakok 9 International Hospital, the Social Development and Human Security Ministry and Ruamkatanyu Foundation to support rescue operations in the flooded areas of Ubon Ratchathani province, while other affected provinces will be considered later.

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