BANGKOK Airways will receive two Airbus A319 aircraft and increase the number of its code-share partners under a plan to boost revenue growth by up to 10 per cent this year, the company’s president Puttipong Prasarttong-Osoth said yesterday.
The carrier also aimed to increase passenger numbers by up as much as 7 per cent this year from last year, Puttipong said at a press conference.
He said that in 2017 the company’s total revenue was Bt28.49 billion, an increase of 6.5 per cent from the previous year. Net profit was reported at Bt846.4 million, with the profit attributable to the equity holders of the company coming to Bt787.9 million. Earnings per share were Bt0.38.
The number of passengers carried last year 5.994 million passengers, rising 5 per cent from the previous year. For 2018, alongside the revenue goal of 10 per cent growth and a 7 per cent in passenger numbers, the passenger load factor is expected to be 70 per cent.
On the outlook and direction, the company will focus on expanding its network to cover the most important destinations throughout Asia “in order to facilitate our passengers and our code-share partners”.
“The company will further utilise our strategic flying hubs, which are Bangkok (Suvarnabhumi), Samui, and Chiang Mai, by offering new non-stop services from these airports to some high potential destinations in Asia, such as Chiang Mai–Hanoi, which is scheduled to operate from March 25, and Phuket-Yangon, expected to launch in the fourth quarter of 2018,” Puttipong said.
For Samui, the company plans to offer some new charter services to cities with high potential in China, such as Samui-Xian and Samui-Changsha. “In addition, increased frequency will be added to our popular domestic and international routes such as Bangkok-Phuket, which will be increased to 66 flights a week, Bangkok-Vientiane to 14 flights a week and Bangkok-Mandalay (Myanmar) to 11 flights a week,” Puttipong said.
"This year, the company plans to increase the number of our code-share partners. In 2017, we signed code-share agreements with four leading airlines: Xiamen Airlines, Thai Airways, Vietnam Airlines and Hong Kong Airlines.
“To date, Bangkok Airways is in partnership with 24 airlines around the world, including our latest partner, El Al Israel Airlines. In 2018, we expect to sign more agreements with another four to six carriers.”
As for aircraft delivery plans, the airline has a total of 38 aircraft in the fleet.
“The company expects to receive two Airbus A319 aircraft and is planning to adjust the ATR72 fleet by removing six of our ATR72-500 and replacing them with the brand-new aircraft ATR72-600s, which will continue the total number of 38 aircraft for 2018,” he added.
This year, the company also plans to invest more in airport-related businesses in order to enhance the company's overall performance. The company plans to build a hangar at Sukhothai airport, which can accommodate aircraft maintenance up to C-Check levels.
The company also plans to expand its Bangkok Air Catering business by opening one more air catering house at the Chiang Mai International Airport, with operations expected to begin in 2018.
The company’s vice president for sales, Varong Israsena Na Ayudhya, said that this year, the company would concentrate on the CMLV countries - Cambodia, Myanmar, Laos and Vietnam - as these countries projected to achieve notable economic growth and high travel demand.
“Apart from these markets, we are eyeing the Chinese market, especially Hong Kong, Guangzhou, Chengdu, and Chongqing. which are growing in terms of economic scale,” Varong said.
“Bangkok Airways currently operates daily non-stop flights between Samui-Hong Kong, Samui-Chengdu, Samui-Guangzhou and Samui-Chongqing and is planning to launch new charter services to Xian and Changsha in the near future.
"For domestic sales, we plan to tap into the corporate travel sector and government travel sector as we see higher travel demand in these two particular groups.“We believe that our products are very well suited for these travellers. For Thai markets, we will roll out some special promotions throughout the year as well as attending some important domestic travel fairs including the Thai Tiew Thai Fair and the Samui Travel Fair to generate advance sales.”
The low-cost carrier Thai AirAsia Co Ltd (TAA) this year is planning to acquire seven aircraft to bring its fleet to 63 aircraft, according to its statement on Thursday.
TAA aims to add more routes to the Indian and Asean markets while maintaining its customer base in the Chinese market. This diversified strategy is intended to minimise the risk of dependence on a major customer base and to enhance the company's future sustainable revenue growth.
TAA is confident it can end the year with a load factor average of 87 per cent and with a target of 23.2 million passengers served.
In 2017, TAA received five aircraft, bringing their year-end total to 56 aircraft.
Tassapon Bijleveld, CEO of Asia Aviation Plc and Thai AirAsia, said that despite an increase in average global fuel prices in 2017, efficient management allowed TAA to continue to grow. Throughout 2017, TAA inaugurated 16 new routes, focusing on inter-regional connections and secondary provinces in support of the overall tourism and government policy.
SMBC Aviation Capital has today announced that it has acquired a new Airbus A350-900 XWB (MSN 0185) from Kuwaiti based lessor, ALAFCO which has been delivered to Bangkok-based airline, Thai Airways. The three-way transaction was completed at the Airbus facility in Toulouse and is part of a two A350 aircraft deal, the second of which will be delivered to Thai Airways in March 2018.
Both aircraft will be fitted with Rolls Royce Trent XWB-84 engines.
Commenting on the announcement, CEO Peter Barrett said “We are very pleased to conclude this transaction with ALAFCO which sees us acquire a new A350 and deliver it to our long-term customer, Thai Airways.We are very pleased to enhance our A350 portfolio which is one of the most technologically advanced widebody aircraft on the market.In addition, this transaction enables us to increase our footprint in the Asia Pacific region, our largest market worldwide.”ALAFCO CEO, Ahmad A. Alzabin added, “ALAFCO is pleased to have successfully completed its first transaction with SMBC Aviation Capital, with the sale representing a good opportunity for ALAFCO to generate value for its investors. In addition, this transaction demonstrates the attractiveness of our aircraft assets globally and is evidence of ALAFCO’s disciplined approach to portfolio management. ALAFCO will continue to invest in this technologically-advanced aircraft, and expects to take delivery of an additional 7 A350 aircraft over the next two years.”
Industry Minister Uttama Savanayana said the National Legislative Assembly (NLA) approved the Eastern Economic Corridor Act, which will raise the confidence among investors that Thailand is now ready to pursue investment projects.
The EEC law will help influence decision making among Thai and foreign investors, expressing confidence that businesses will be attracted to the EEC zone, now that a law which was designed to ensure sustainable growth and development has been endorsed by the lawmakers.
The law also stipulates compensation for local people who are affected by the EEC project.
He said the MOI will hold a roadshow next month to attract local and international investors, including the Europeans and will expedite the drafting of Terms of Reference for five infrastructure development projects so that the investment will begin to take place by December.
The EEC will shortly propose to the cabinet for the setting up of the EEC policy commission within 60 days, and for the appointment of an EEC policy secretary-general within 90 days.
EEC Secretary-General Kanit Sangsubhan said the EEC Act is the first law to govern the directions of the EEC project in Chachoengsao, Chonburi, and Rayong, which could be use as a model for development projects in other parts of the country in the future.The law calls for the establishment of a permanent EEC policy office for long-term sustainability. The office will be under the management of a 28-person EEC policy commission chaired by the Prime Minister.
HONEYWELL Aerospace, a manufacturer of aircraft engines and avionics, is negotiating with Thai airlines to provide what the US-based company calls connected aircraft services after it signed three such contracts with the Singapore Airlines Group.
The Singapore deals will provide the latest Honeywell technologies and services to help improve operational capabilities for Singapore Airlines, SilkAir and Scoot, Honeywell’s vice president for airlines in the Asia-Pacific region, Brian Davis, said in a group interview at Air Show 2018 in Singapore yesterday.
“Thailand’s aviation business is experiencing faster growth and needs to further modernise technology to serve that business growth, with Thailand being a hub to link with the Indochina countries, comprising Cambodia, Vietnam and Laos, as well as Myanmar,” Davis said.
Thailand is a key market for the company’s business in Indochina and needs more technology to develop its aviation facilities to serve the strong demand in the market, he said.
The company also is negotiating with other airline operators elsewhere in Asia, including in the Philippines, Indonesia, Malaysia and China.
Davis said that its connected aircraft business will provide the software to improve flight management, flight safety, passenger experience, maintenance, flight operations, aircraft turnaround times and reduce costs.
He said the connected aircraft will anticipate opportunities and offer unique insights by harnessing the power of analytics with the confidence of the secure communication link.
The company says the connected aircraft service reduces fuel costs and emissions by up to 5 per cent and operational disruptions by up to 35 per cent, while cutting maintenance and operations costs.
Davis said connected aircraft will provide “the best experience” for airline passengers.
“For example, it provides 10x100x faster Wi-Fi speeds and smoother and safer flights,” he said. “Flight operators also will save up to 5 per cent in flight time with ATC priority, and improve arrival times and dispatch speed. The ground operation also cuts troubleshooting time by up to 25 per cent.”
According to the company’s research, the market value of the connected aircraft business worldwide will reach as much as US$6 billion in 2020. This provides for an opportunity for the company to expand its business globally and in the Asia-Pacific region, Davis said.
The company’s president for Asia-Pacific, Steve Lien, said Honeywell is eyeing business expansion in the Asia-Pacific, especially in Southeast Asia and China, where it sees strong growth in the aviation business.
“From 2017 till 2036, the Asia region will have demand for 16,050 aircraft worth US$2.5 trillion,” said in a group interview yesterday at the air show.
“This will drive aviation business in the region to sustain strong growth. This challenge for our business expansion in this region, especially with the connected aircraft services, is to help airlines better manage their traffic and services for their customers.”At the end of 2016, Honeywell Group announced a total sale values of US$39.4 billion, with US$14.8 billion from is aerospace business, US$10.7 billion from home and building technologies, US$9.3 billion from performance materials and technologies, and the remaining US$4.6 billion from safety and productivity solutions.
THAILAND is moving quickly to become the regional aviation and aerospace hub as the world’s leading aircraft and parts manufacturers from the US, Europe and China are moving to invest in the country’s Eastern Economic Corridor (EEC).
The world’s top two commercial aircraft manufacturers, Airbus and Boeing, are planning for joint investment with Thai Airways International this year while Jinpao Precision Industry Co has just signed a deal to build a new plant in the EEC area, where U-Tapao international airport is situated.
The Thai government has set to invest trillions of baht in infrastructures to develop EEC to accommodate foreign investment including the expansion of the U-Tapao airport, construction of motorway, deep sea ports, high speed railway linking U-Tapao, Suwannabhumi and Don Mueang international airports and another line linking the EEC, Laos and Southern China.
Kanit Sangsubhan, secretary general to the EEC, said aircraft manufacturer Airbus is to cooperate with Thai Airways International Plc to invest in a big aircraft repair center, paint shop, logistics and training center with a projected investment of billions of baht while Boeing plans to invest in manufacturing aircraft parts and a simulator training center starting this year.
Jinpao last week purchased a 54-rai plot in the Hemaraj Eastern Seaboard Industrial Estate 2, where it will build a new plant to produce structural sheet metal parts to serve the aerospace and medical industries.
Jinpao president Chung Kuo-Sung said the cost of land acquisition and construction of the new plant will be around two billion baht. The new plant is expected to start operation in the next two years.
“Hemaraj 2 represents a great location in terms of logistics, transportation and convenient infrastructure. So with the development of the EEC, the location is perfect to serve our requirements,” he said.
The EEC areas cover Rayong, Chon Buri, and Chachoengsao provinces. The area is best suitable for new businesses in the new S-Curve industries ranging from next-generation automotive, robotics, aviation and logistics, to medical hub.
Analysts say Thailand’s move to become the aviation and aerospace industry hub in the region will directly affect Singapore which now dominates aerospace maintenance, repair and overhaul (MRO).
Singapore is still confident it would maintain the lead saying while Thailand has an edge over Singapore in terms of location, availability of land and cheap labor, there are other bigger challenges to overcome.
They include building the necessary infrastructure, cutting down on red tape and providing a conducive political environment to encourage new foreign investments.
However, the Thai government believes U-Tapao can provide an alternative to Singapore, which is “at capacity” already.
An industrial source told a Singaporean press that this plan requires big investments and Thailand’s bureaucracy system can be very slow and not “perfectly clean” and may be susceptible to corruption.
He also said the government needs to review the law on foreign ownership and come up with clearer policies, as political instability in the past decade has created uncertainty for new investors.
Despite such criticism, Prime Minister Prayut Chan-o-cha has already issued an order under Article 44, which grants the junta absolute powers, to ease limitation on foreign ownership in aviation maintenance center and would allow foreigners to own more than 50 per cent of shares in MRO businesses.
What about the problem of starting business in Thailand claiming to be difficult?
That may not be the case anymore at the moment.
Thailand has just been voted the Number One ranking of the list of Best Countries to Start a Business for the second year in a row out of a total of 80 countries surveyed by the US News and World Report beating Singapore, which ranks fifth.
The US media firm also placed Thailand on the 8th ranking of a list of 25 Best Countries to Invest In, 20th Best Country to Start a Career and 35th Best Country to Headquarter a Corporation.
The Commerce Ministry attributed Thailand’s improved ranking in the two categories to the cutback on the red tapes for the registration of new business in Thailand and the expenses for registration for business operators.
The report was based on the random survey of the opinions of 21,000 respondents worldwide.
“Starting a business in Thailand takes about five days,” according to the World Bank. New business density is one of the lowest in the region, leaving room for hopeful entrepreneurs.
Deputy Transport Minister Pailin Chuchottaworn has urged Thai Airways International Plc (THAI) to procure smaller aircraft to decrease operation and maintenance costs for some of the national carrier’s routes, in a bid to decrease its large debt and keep up with emerging low-cost airlines.
The deputy minister commented on the airline’s financial state after his scheduled policy-giving visit to THAI’s headquarters yesterday, as part of a government initiative to decrease the huge debt levels at seven state enterprises.
Rehabilitation plans for transport-affiliated state enterprises include THAI, the Bangkok Mass Transit Authority (BMTA), which operates Bangkok’s public buses, and the State Railway of Thailand (SRT), which operates the country’s provincial trains.
The three authorities have an estimated combined debt of 200 billion baht.
According Mr Pailin, THAI will have to “figure out” how to lower its overall fixed costs in order to succeed with its corporate rehabilitation plans to decrease its accumulated debt.
He urged the airline to conduct research into how some low-cost airlines are able to offer full service at cheaper prices and comparatively lower fixed costs. He also instructed THAI to deal with its discharged aircraft, which are awaiting procurement by other airlines.
Transport Ministry reports state that for this year, THAI plans to procure 28 more planes to compensate for its discharged aircraft. According to the report, 19 will be used by the national carrier, while the remaining nine will be used by its low-cost subsidiary airline, Thai Smile Air.
“Plans for the new planes awaiting procurement should also be reviewed, especially if the type and size of the aircraft are suitable for the routes [they were procured for],” Mr Pailin said. “The carrier must also observe whether its direct competitors are leasing their planes or purchasing them.”
Meanwhile, the State Enterprise Policy Office, also known as the superboard, rejected rehabilitation plans submitted by THAI and the BMTA last week. According to its chief Ekniti Nitithanprapas, the national carrier has failed to meet its revenue target despite servicing more passengers than its main competitors.
Mr Ekniti last Friday instructed THAI to draw up long-term plans that better reflect competition in the market, adding Thai Smile should also be included.
The BMTA’s rehabilitation plans, submitted last week, included a proposal to introduce a 2-baht fare hike for all of its buses.
Mr Ekniti said the authority’s plans must first include how the bus services and new routes will supplement or connect with other mass-transit systems.
BMTA deputy director for bus operations Prayoon Choygeo said last Friday any possible price hikes would “surely not happen anytime soon”.
Prime Minister Prayut Chan-o-cha has also approved the SRT’s rehabilitation plan to set up a subsidiary to manage its assets and reduce debt.
The Department of Airports will open bidding for its regional airports development projects -- valued at 8.8 billion baht -- this year, department director-general Darun Sangchai said.
Mr Darun said the bidding will be staged to seek contractors for four provincial airport development projects and the installation of the In-Line Baggage Handling and Screening system, an automated security programme worth a total 8.8 billion baht being used to screen baggage at several other airports.
Contract signings for all projects are expected to be completed this December as the budget was allocated under the first quarter of the 2018-fiscal year, between this October and January.
The airport development projects worth 7 billion baht will be implemented on four provincial airports in Krabi, Khon Kaen, Ubon Ratchathani and Trang. Of the budget, about 3.2 billion baht was allocated for Krabi airport, for a new passenger terminal and maintenance of two existing terminals, while another 1.3 billion baht will be spent on improving its aprons.
For Khon Kaen airport, 2.2 billion baht was allotted for the expansion of its terminal and parking lot, to allow it to handle up to 1,000 vehicles, while the Ubon Ratchathani airport terminal will also be enlarged to accommodate more passengers with a 177-million-baht budget.
At Trang airport, 110 million baht will be used in expanding its departure passenger terminal to accommodate three flights per hour in order to alleviate congestion.
The department also plans to seek an additional budget for the construction of a new terminal at the airport in the 2019-fiscal year.
Mr Darun also said the department was in the process of seeking contractors to install the In-Line Baggage Handling & Screening system -- costing 1.8 billion baht -- at eight airports in Ubon Ratchathani, Nakhon Si Thammarat, Trang, Khon Kaen, Phitsanulok, Sakon Nakhon, Nakhon Phanom and Narathiwat.
The system has already been installed at Krabi, Surat Thani and Udon Thani airports. The department aims to complete installation at 29 airports nationwide by next year. The system is being installed in compliance with security measures raised by the International Civil Aviation Organisation, he said.
Speaking about the department's new airports under development, Mr Darun said a new terminal, valued at 447 million baht, was under construction at Mae Sot airport in Tak.
The terminal is expected to handle up to 600 passengers per hour or about 1.5 million travellers per year.
Mr Darun said the department also wanted to upgrade Mae Sot airport to make it an international airport. Almost 300 million baht has gone into expansion of aprons, taxiways and runways at the airport, so it will be able to handle large-sized aircraft.In Yala, Betong airport, the department's 29th regional airport, is also under construction, and is expected to be finished within the next two years.
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