Nok Air (DD, Bangkok Don Mueang) has outlined its business recovery plan, following the announcement last week that it had suffered a THB3.3 billion (USD93.2 million) loss in 2016. Speaking with the Bangkok Post, chief executive Patee Sarasin says that the airline will cut aircraft capacity by 5%, increase daily aircraft utilisation, and rationalise its route network.
The carrier, which is 39% owned by Thai Airways International (TG, Bangkok Suvarnabhumi), had a tough 2016, with a pilot strike early in the year crippling operations. Operating costs blew out by 14.1% to THB15.7 billion (USD444 million), largely due to engine maintenance expenses which converged at the same time, further pushing the airline into the red.
As part of its plan to cut aircraft capacity, Nok Air will lease out three or four of its B737-800s. Patee says that they will also work to utilise aircraft for ten hours a day, rather than the current eight hours. The airline will cut unprofitable routes and boost services on high-performing ones, such as Bangkok Don Mueang to Udon Thani and Ubon Ratchathani. Additionally, new international routes will be added to Phnom Penh and destinations in India.
Despite the cut in aircraft capacity, Nok Air hopes to keep passenger numbers at the same level as last year (8.56 million) with a cabin load of more than 80%.
But the chief executive is pragmatic about the recovery process. "It's unrealistic to expect us to be back in the black this year due to the depth of problems," he said. "But maybe we can break if our remedial plan works well and no significant impact from external factors arises."
