Bangkok Airways sees a brighter future

Based on signs that demand is picking-up, Bangkok Airways believes it can close the year with a profit but the accumulated loss in 2008 and 2009 will remain.

Since December, last year,  airline bookings surged and continue to be strong through Februar,  although last minute bookings are the dominant trend.

Bangkok Airways president, Puttipong Prasarttong – Osoth, told the press at the launch  of its new Lampang service, 8 February, that the airline should carry 2.7 to 2.8 million passengers, this year, up from around 2,550,000 passengers last year.

Revenue should reach Bt8.5 billion giving the airline a 6 to 7% profit. Last year the airline earned Bt7.2 billion and posted a loss of Bt0.96 billion. The airline accumulated loss stands at around Bt1.4 billion.

“We are confident we can turn a profit this year, based on assessments that demand is picking and we had already made adjustments in several areas — costs, personnel, fleet, last year.”

“Fuel prices should stabilise and not be as volatile as they were in 2008, although they have has risen recently during a severe European winter, but there are no huge fluctuations and if it stays that way, we can cope.”

On network expansion, Mr Puttipong says the airline will be very conservative.

“We may look at suspended international routes if demand returns, but it will bea very measured approach taking into account all factors.”

The emphasis will be on strengthening existing services and providing more frequencies.

The summer schedule, effective mid March, will see the airline add an extra flight to Chiang Mai, from three to four flights daily.

“Earlier we increased Phuket service from three flights daily to five and it works. We have seen passengers uplift on this route double since then,” said the president.

The airline commenced a new service to Lampang via Sukhothai, 1 February. It will take about six months to evaluate performance when the route will come up for review.  If traffic is satisfactory, Lampang could be served by a nonstop service from Bangkok. If not it will remain in the network as an extension of the Sukhothai route.

Sales  will be boosted through two main channels; travel agents (50%) and the airline’s website (20%).

More code-share agreements are in the pipeline with KLM and Malaysia Airlines. Currently it has well established code-share deals with Thai Airways International, Air France, Air Berlin, Etihad Airways and EVA Air.

The airline remains interested in gaining a concession to operate 28 airports under the supervision of Civil Aviation Department. The plan was dusted off recently by Transport Ministry, Sophon Sarum. It was first discussed about 10 years ago, but failed to gain serious consideration by subseqeunt governments. Bangkok Airways at the time was one of several companies that showed initial interest.

“This issue was raised by previous governments and repeatedly shelved. Nothing happened at all. Last Friday, the minister summoned us to ask whether we were still interested in this project and we confirmed our interest.”

The airline has not completed studies and a business plan on the project.

“We need to review the government’s conditions first, but in principal, we will would have to take over all 28 airports, though half of them are disused.

“We would not want to fly to  all the airports exclusively ourselves, just because we managed the airport. Other airlines could use the airports. This would also include companies that offer ground handling services,” said Mr Puttipong.

There are concerns that if Bangkok Airways or another private company takes over the management of the airports, the service fees would be high.

Mr Puttipong argues that would not be the case as the government usually sets a ceiling on fees in contractual arrangements.

During the Thaksin administration, the subject was given an airing,  but two laws prevented execution– the Private Participation In State Undertaking BE1992 and Air Navigation Act 2008.

However, the DCA director general, Wutthichai Singhamanee, was quoted by the Thai press as saying there was a loophole that would allow the project to be given to a private company by enacting a special resolution of the Cabinet.