Nok Air targets halving losses to B1.4bn

Nok Air targets halving losses to B1.4bn

Budget carrier Nok Air expects to cut losses by almost half from last year's figure, thanks to plans afoot to boost revenues, according to Wutthiphum Jurangkul, the airline's chief executive officer.

The airline is on course to perform better than last year with projected losses of 1.4 billion baht, down from 2.7 billion baht last year.

The CEO attributed the significantly improved performance to cost-reduction measures. Nok Air has entered into a deal with a new business partner which saw the maintenance costs reduced by more than 10%.

At the same time, the carrier has trimmed the cost per available seat kilometre (CASK) by 10% while cancelling unprofitable domestic routes from Bangkok to Nan, Roi Et and Nakhon Phanom.

Mr Wutthiphum added that new routes will be opened where there is high potential for profits.

Next year, Nok Air is looking to launch new international routes to tap the foreign passenger market. The airline hopes to raise its proportion of international customers to 30%.

The CEO expressed confidence that passenger numbers will surpass the 10 million mark for the first time next year, up from 8-9 million passengers on average per year at present.

Targets also include a 10% rise in available seat kilometres (ASK) and maintaining the load factor above 90%. ASK is the industry’s measure of passenger carrying capacity.

Mr Wutthiphum said Nok Air is exploring ways to lift its non-aero business revenue by offering more premium quality services and products to attract customers. The airline is planning to offer free WiFi connection on board next year. 

The CEO predicted competition will remain fierce for low-cost carriers with a price war continuing well into next year. Nok Air is closely monitoring fare levels.

Several budget airlines have ordered new aircraft and opened new routes to destinations within the region.

NokScoot is expanding routes to second-tier cities in India, China and Japan. The focus will be on cities not served by rival carriers but which have robust traffic demand. NokScoot is a joint venture between Thailand’s Nok Air and Scoot, a subsidiary of Singapore Airlines.

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