NokScoot on course to break even

NokScoot on course to break even

Airline's focus on China market pays off

Struggling long-haul budget airline NokScoot is aiming to fly through the break-even barrier by the end of this year.

"Our financial performance is improving, allowing us to break even or be close to that point at the end of 2016," chief executive Piya Yodmani told the Bangkok Post.

Such expectations come against the backdrop of a robust performance resulting from the airline's focus on the vast China-to-Thailand travel market.

Piya Yodmani sees a turnaround in NokScoot's balance sheet by year-end.

NokScoot, 49% owned by Singapore's no-frills Scoot Pte and 51% by SET-listed budget airline Nok Air, including four of its senior executives, posted a 1.3 billion baht net loss over a 15-month period to March this year.

The airline got off the ground in May last year.

The improved performance is reinvigorating the carrier's growth strategy, which had earlier appeared to be stuck in second gear.

Mr Piya said NokScoot was focused on the Chinese market, with more routes linking up with Thailand in the works.

Chongqing is set to be the fifth Chinese city which NokScoot serves, with three flights a week taking of from its Bangkok base at Don Mueang airport starting from June 8.

NokScoot currently operates scheduled services to four Chinese cities: Nanjing (six flights a week), Qingdao (five), Tianjin (four) and Shenyang (three). The bulk of the passengers are Chinese tourists.

The only other non-mainland destination in NokScoot's current network is the Taiwanese capital of Taipei, with four flights a week.

One more Chinese city will join NokScoot's network before the end of this year, Mr Piya said, without naming the city.

NokScoot has upgraded China to a priority market, as it had originally targeted Japan and South Korea, though it was ultimately impeded by restrictions related to Thailand's aviation safety deficiencies raised by the International Civil Aviation Organization (ICAO).

The red-flagging by the ICAO and later by the US Federal Aviation Administration last year precluded Thai-registered airlines from opening new routes, raising the frequencies of existing flights to foreign countries or changing the types of aircraft it deploys.

Unlike Japan and South Korea, which strictly comply with the global safety auditing agencies' guidelines, China has opted to make its own determination on whether Thai-registered airlines like NokScoot can operate on its territory.

NokScoot is looking to double its fleet of Boeing 777-200 wide-body jets with the acquisition of three additional aircraft, said Mr Piya.

The airline's choice to maintain the same aircraft type -- the B777-200 -- is consistent with the ICAO rulings, enabling NokScoot to fly into countries which have granted it permission.

NokScoot has also begun soliciting proposals from Boeing and Airbus to supply brand new next-generation wide-body jets to the airline.

Mr Piya said either Boeing's 787 "Dreamliner" or the Airbus A330neo is on the list.

He noted that the aged B777-200s, sourced from Scoot, will serve as "interim" stock before a transition to new, fuel-efficient replacements is made.

It remains unclear, however, when the ICAO red flag on Thailand will be lifted, complicating any such acquisition.

"Until the picture is clear, we won't make any decision," Mr Piya said.

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