Sunday, January 15, 2012

Nok Air beats earnings goal with B220m

Nok Air posted a better-than-expected profit last year despite higher costs inflated by the devastating floods in the fourth quarter.

The budget airline ended 2011 with net earnings of close to 220 million baht, higher than the 193 million it estimated when the deluge hit its home base at Don Mueang Airport on Oct 25, forcing it to flee to Suvarnabhumi Airport. The evacuation cost about 100 million baht, said chief executive Patee Sarasin.

Earnings for the first three quarters cushioned the negative flood impact.

Mr Patee was cautiously optimistic about the airline's outlook for 2012, though he expects sluggish performance in the first half as travellers cut back before a recovery in the second half.

"People will spend money on fixing their houses in the first half," he said.

He predicted a revival of travel sentiment in the second half if there was not a repeat of the floods.

Mr Patee hoped Nok Air could report higher profits this year than 2011, but did not provide any figures.

Its revenues are projected to reach 5.9 billion baht, up from around 4 billion last year, partly because of a 15% increase in aircraft capacity.

The return to its home base at Don Mueang, expected by February or early March, will likely improve its operating costs, efficiency, punctuality and ticket sales.

Heavy congestion at Suvarnabhumi has caused the airline to spend more jet fuel waiting for take-off slots, causing flight delays and frustrating passengers.

After moving to Suvarnabhumi, Nok's on-time average plunged to 28% before improving to 75-80% recently. Its pre-flood record at Don Mueang was 96%.

Several passengers prefer to travel via Don Mueang, as it only takes 5-10 minutes from landing to reach ground transport.

This year, Nok Air targets 5 million passengers, 1 million more than last year's record of about 4 million, as a result of increased capacity with the additional seats offered by its new Boeing 737-800s.

There will be 12 aircraft in Nok Air's fleet this year compared to 14 last year as two jets, the B737-400s, leave service this year.

The fleet consists of five B737-800s, five B737-400s and two ATR 72 turboprops.


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