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Refueller prepared for 5-6% sales slide
NAREERAT WIRIYAPONG
Bangkok Aviation Fuel Services, the country's largest jet refuelling provider, forecasts a worsening performance for the aviation industry in the coming quarter and has revised its sales projection downward. SET-listed Bafs saw its second-quarter revenue fall 1.6% year-on-year to 536 million baht, while net profit dipped 18.9% to 28.9 million baht. Its first-half profit was 264.98 million baht, down from 315 million a year earlier.
Bafs had set a target of increasing its revenue by 4.5% from around 1.5 billion baht posted in 2007. It now expects its 2008 revenue to be 5-6% under its 1.6- billion-baht projection, slipping 2-3% below last year's figure.
''We expect the situation to get worse in the third quarter than in the second quarter,'' managing director M.R. Supadis Diskul said yesterday.
''Bafs is a part of the aviation industry, which this year has been worst hit by the oil crisis and the slowdown in the global economy _ both have prompted airlines to cut flights, especially long-haul ones.''
Thai Airways International has suspended its direct flights to New York and Los Angeles, which is expected to cause a 10%-drop in Bafs' sales to the airline. Meanwhile, budget airline flights arriving at Suvarnabhumi and Don Mueang Airport have fallen since June to below last year's levels.
''Nok Air also has cut flights while One-Two-Go has suspended operations since last month (on safety concerns),'' said M.R. Supadis.
To cope with the declining business, Bafs has focused on reducing its expenditures, cutting training expenses and management perks. At the same time, land and non-performing assets are up for sale to generate an expected additional income of 100 million baht.
To counteract the impact of high prices, Bafs has also raised service charges at Don Mueang and two other provincial airports _ although scheduled flights, including those of Thai Airways International, Nok Airlines and One-Two-Go, have yet to be affected by price rises.
Since June, Bafs' fees have almost doubled from 55 satang to one baht a litre for services provided to private jets, charter and ad-hoc flights landing at Don Mueang Airport. Meanwhile, service fees at Samui and Sukhothai airports have gone up about 20% to 70 satang a litre since the beginning of this month, said M.R. Supadis.
However, he is optimistic that the aviation sector will experience a recovery before the end of the year.
''As oil prices including jet fuel have dropped, we hope that the aviation industry will start picking up in the fourth quarter with airlines starting to resume their flights for the high season,'' he said.
Shares of BAFS fell 10 satang to 8.50 baht yesterday on the Stock Exchange of Thailand in trade worth 1.17 million baht
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