Thailand Vacations & Thailand Travel 3 Airlines cut routes to save costs
Thailand Vacations & Thailand Travel
3 Airlines cut routes to save costs
Three low-cost airlines - Nok Air, One-Two-Go and Thai AirAsia - have cut and rescheduled flights in response to record-high jet fuel prices.
Effective yesterday, Nok Air cut three domestic routes - Bangkok-Chiang Rai, Bangkok-Ubon Ratchathani and Bangkok-Krabi. It is also considering reducing its 21 flights a week to Phuket.
Affected travellers are being transferred to Thai Airways International and Thai AirAsia.
The domestic route changes followed the cancellation of its international Bangkok-Bangalore and Bangkok-Hanoi flights.
“We’re losing money,” an airline representative said, who declined to confirm if losses were as high as Bt1 billion as had been reported. The reports have fuelled expectations that the airline would be shut down soon.
Meanwhile, One-Two-Go has cut the number of Bangkok-Chiang Mai and Bangkok-Phuket flights from 28 per week to 21, starting yesterday. The flight frequency to Hat Yai has also been cut by half to seven, while those to Chiang Rai and Nakhon Si Thammarat are down from seven to two flights per week. The daily flight to Surat Thani is to continue.
Thai AirAsia has cancelled the weekly flight to Xiamen, China, due to lack of passengers.
Tassapon Bijleveld, chief executive officer of Thai AirAsia, said operating costs had jumped from 30 per cent to 50 per cent due to spiking oil prices.”However, we have no further plans to reduce or cut more flights,” he said.
The airline planned to add more international routes from Bangkok to Hong Kong and Guangzhou, China, within the next two or three months. It is also studying scheduling flights to
Bali. The airline recently started flights to Jakarta and Ho Chi Minh City.
Thai AirAsia has increased its flights to Phuket and Chiang Mai. The airline expected the number of passengers to reach 4.6 million this year, a 25-per-cent growth rate.
To survive the lower passenger traffic due to higher travelling costs, the airline has approached 15 corporate clients to encourage more business travel.
To boost loyalty, the airline has launched a programme paying up to Bt1,800 to compensate passengers whose flights are delayed more than three hours.
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Nok AIR cuts local routes, management salaries to reduce costs
Low-cost airline Nok Air has cut salaries and reduced domestic routes in order to save costs.
CEO Patee Sarasin yesterday said the airline would cut management pay by 20 per cent. There are 30 to 40 people at management level who will be affected. The move is expected to save Bt4 million per month.
Meanwhile, the airline is considering increasing fares by up to Bt240.
“The airline has already lost Bt114 million, which is lower than was reported earlier,” Patee said.
He also confirmed that the airline would not stop operations, as media speculation predicted. Moreover, the airline is still working with its parent company Thai Airways International, in services as well as marketing.
Nok Air’s board agreed to the measures yesterday following discussions about the airline’s future.
On Tuesday, the airline cut three domestic routes, from Bangkok to Chiang Rai, Ubon Ratchathani and Krabi.
Nok Air cancelled all flights between Bangkok and Bangalore last November and Bangkok and Hanoi in May. However, it is still operating Bangkok-Udon Thani, Bangkok-Trang, Bangkok-Nakhon Si Thammarat and Bangkok-Chiang Mai services.
Passengers on cancelled routes are being transferred to Thai Airways International and Thai AirAsia. Those preferring not to travel can reclaim their money from Nok Air.
The airline was established in December 2003 and started operations on July 23, 2004. Its shareholders are: Thai Airways (39 per cent), Dhipaya Insurance (10 per cent), the Government Pension Fund (10 per cent), Krung Thai Bank (10 per cent), the Crown Property Bureau (6 per cent), and ING Funds, King Power, Siam Commercial Bank Securities, Patee Sarasin and Supapong Asvinvichit - each holding 5 per cent.
Nok Air began its first daily international service to Bangalore on May 31, 2007. The airline also has landing rights for additional Indian cities: Chennai, Hyderabad and New Delhi.
Nok Air suspended its operations to Bangalore last November,reportedly due to non-availability of aircraft, and to allow services to more lucrative routes in Southeast Asia.
One-Two-Go forced to suspend operations for nearly two months
Low-cost carrier One-Two-Go will suspend its operations from July 22 to September 15, making it the first airline victim of record oil prices.
Founder and CEO Udom Tatiprosongchai said the unrelenting rise in oil prices had forced the airline to shut down temporarily.
During this period there will be a reorganisation to prepare for a return to business.
“The company has been losing money for months, and we cannot continue like this,” said Udom, adding that One-Two-Go would resume operations when the situation improved.
Two of its rival, Thai AirAsia and Nok Ai, are still in service but facing the same cost pressure.
Both have revised their business strategies and rescheduled some routes.
Udom said One Two Go had been operating based on actual costs while other players had different strategies. In a statement, One Two Go said high oil prices were hurting the global airline industry.
Airlines world-wide have cut 30 per cent of their flights and raised surcharges to stay in business.
One Two Go was the country’s first low-cost airline, starting its service in December 2003 with a Bangkok-Chiang Mai flight.
It ran into trouble when one of its planes crashed in Phuket, killing 90 passengers. Rumours abounded that it could face regulatory problems due to its safety record.
Udom declined to comment on this issue.
Relatives of the victims in the Phuket crash have started a web-site, http://www.investigateudom.com, to campaign for an investigation into Udom’s business conduct.
It was alleged that Udom had misled pilots into flying unsafe planes and paid bonuses for those who worked beyond the legal maximum of flying hours.
Chaisak Angkasuwan, director-general of the Civil Aviation Department, could not be reached for comment yesterday.