Nok Air projects stable profit

Nok Air ended 2009 with a Bt384 million net operating profit and projects this year, profit will stabilize at conservative  Bt300 million due to an investment in new routes and higher fuel costs.

Nok Air CEO, Patee Sarasin  reported during a co,de-share signing ceremony with Thai Airways International, earlier this week, that the Bt384 million net profit was due to declines in fuel costs in the latter half of last year.

“With  new routes transferred from TG, we should gain Bt300 million and around 3.2 million passengers, up from 2.3 million in 2009,” said Mr Patee.

Earlier, the airline estimated that its 2010 profit would be cut in half to Bt150 million.

The new domestic services will help boosting revenue, although additional operational costs associated with the new services and higher fuel costs will mean the airline’s best case scenario for operating profit will still be Bt84 million below  the 2009 result.

Nok Air has conducted studies on new domestic routes that were served by PB Air — Nan, Lampang, Roi Et and Phrae, but has not yet made a decision on whether it will serve these destinations or not.

Three Northeast destinations taken over from PB Air — Sakon Nakhon, Nakhon Phanom and Buri Ram — generated an operational profit from the start. In the summer schedule, the airline will serve both Sakon Nakhon and Nakhon Phanom with daily flights.

THAI executive vice president, strategy and business development, Chokchai Panyayong, fielded questions on whether the airline would dump more domestic routes.

“We will definitely fly to major cities in each region — Udon Thani, Phuket and Chiang Mai.  Chiang Rai, Samui and Krabi, are secondary routes, but they are tourist destinations, so we have to keep them to contribute to the network.”

On overlapping routes, such as Khon Kaen, Hat Yai and Surat Thani, “THAI will continue to serve them, but will review performance and demand in the future,” Mr Chokchai elaborated.

Nok Air will also resume regional operations over the next two years.

“After building our domestic market, we will move to regional destinations to tap the budget market,” Mr Patee said.

Nok Air cancelled its flights to Bangalore in India and Hanoi, the capital of Vietnam, during the economic crisis.