Nok Air plans profit from route expansions
Firm eyes B17.8bn in 2018 revenue
Nok Airlines Plc, operator of low-cost airline Nok Air, aims a turnaround to profit this year thanks to expansion of domestic and international routes.
With a focus on cost-cutting plans, higher capacity and aircraft utilisation this year, the airline hopes to avoid a loss.
Nok Air posted a net loss of 1.9 billion baht last year.
“Our target is to turnaround from a loss to a profit,” said Piya Yodmani, Nok’s chief executive.
The airline wants total revenue to increase by 3 billion baht to 17.8 billion this year.
In 2018, Nok Air aims to raise passenger numbers by 4% to reach 9 million, up from 8 million last year, as well as increase available seat kilometres by 29%.
For network expansion, it will continue focusing more on the mainland China market by increasing frequencies on existing routes or adding more routes.
This year, the airline plans to operate new flights to the India market, expected to start in June 2018.
“Expansion into overseas markets will be able to help Nok Air to increase revenue from international flights operation to 40% from 20% last year,” Mr Piya said.
The airline’s 2018 growth plan should further strengthen collaborations with two partner groups — THAI Group and Value Alliance (a group of low-cost airlines),
he said.
The company’s financial reports showed Nok Airlines and its subsidiaries reported a net loss of 1.89 billion baht in 2017, compared with 3.26 billion a year earlier.
The net loss was divided into the losses from the owners of the parent company and non-controlling interests, in the amounts
of 1.85 billion baht and 45.4 million, respectively.
Nok Airline’s revenue in 2017 was 14.8 billion baht, which increased by 12.7% from 2016.
This was the result of both incremental passenger revenue and service revenue, which increased by 10.7% and 53.4%, respectively, from the previous year, mainly because of the rise in the number of charter flights to China.
Last year, the airline opened 19 new routes to China, adding two Boeing 737800 aircraft, and retained its good on-time performance records of 80%.
New routes opened to China last year comprise: Baotou, Changsha, Chengdu, Datong, Haikou, Linyi, Meixian, Nanchang, Nanning, Nantong, Yancheng, Yinchuan, Yichang, Zhengzhou, and Zunyi from Don Mueang, U-tapao, Phuket, and Chiang Mai.
Other new routes added last year were Yangon-Mae Sot and Udon ThaniUbon Ratchathani.
Mr Piya said average cabin factor last year was 86%, a 1% increase from the previous year.
The cabin factor for this year is projected at 92%.
Nok Air is scheduled to receive four aircraft in 2019, two in 2020 and two in 2021.
The additions to the fleet are expected to help the airline expand network coverage to include medium-haul routes that the airline is looking at in northern Asia.