Monday, September 24, 2007

Thailand's air disaster CEO to rethink strategy after tragedy

Udom may have to rethink One-Two-Go strategies

Soon as he learnt about a crash of his One-Two-Go airline on Sunday, Udom Tantiprasongchai, founder and also chief executive officer of Orient Thai Airlines, came out to express his regret over the tragedy.

Udom may have to rethink One-Two-Go strategies


Speaking on television, he extended his condolences to the victims and their families and promised to take care of them. It was quite rare for Udom to come out in the public. For throughout most of his business life, he prefers to shun publicity.

Following the Thai government's implementation of an open sky policy, Udom began to set up his Orient Thai Airlines, a boutique airline company that sought to carve out its niche market.

Orient Thai Airlines relies on Bangkok as a hub, operating charter and scheduled services in Southeast Asia. Its main base is Don Muang International Airport.

Udom is known that closed to military people both in Thailand and Cambodia so that he can run the business well. He also has a regional outlook.

Yet it was off to a rocky start. The airline was formerly known as Cambodian International Airlines. Udom had close ties with the Cambodian authorities. With business problems, Orient Thai ceased scheduled operations on January 9, 1998. But it continues to operate charter services on behalf of Kampuchea Airlines.

However, scheduled operations have since been restarted. It is now wholly owned by private Thai shareholders and has 820 employees (at March 2007).

Three years ago, Udom came up an idea to set up a budget airline based in Bangkok. He eventually set up a wholly owned OneTwoGo Airlines as the proliferation of the budget airlines was fully in vogue. Orient Thai also has a 49 per cent stake in Kampuchea Airlines.

As of September 2007, the OneTwoGO Airlines fleet consists of aircraft 3 Boeing 747100, 1 Boeing 747200, 3 Boeing 747300, 6 McDonnell Douglas MD82 and 1 McDonnell Douglas MD83.

Udom has gone into the airline business because he forsees bright opportunities in the commercial aviation industry.

One Two Go was the first local low cost airline, started the operation between Bangkok to Chiang Mai in 2003. The airline operated as no frill airline ahead of Thai AirAsia.

However, it has not been as successful as Thai AirAsia.

A Phuket bound plane crashed at Phuket international airport amid heavy rain after flying from Bangkok on a budget flight. The aircraft is believed to be a MacDonnel Douglas MD 80 aircraft.

The airline is operating from Bangkok ( Don Mueang International Airport) base Bangkok ( Suvarnabhumi Airport) to Chiang Mai, Chiang Rai, Hat Yai, Krabi, Nakhon Si Thammarat, Phuket and Surat Thani.

Udom has also managed to penetrate into the charter flight and establish business contacts with other international airlines. Orient Thai Airlines was Asia's first international charter operator. Along with its subsidiary, Kampuchea Airlines, it provided services to other airlines including Finnair, Lufthansa, LTU and Merpati.

Udom's niche market was the business with the United Nations. Orient Thai Airlines transported refugees around the world for the UN's International Organization for Migration (IOM), including returning people to Kosovo from Australia and helping Timorese return to East Timor in 1999 after it won its independence from Indonesia.

Orient Thai became a designated UN carrier, transporting troops for peacekeeping operations worldwide.

Orient Thai aircraft also fly Muslim Hajj pilgrims to Saudi Arabia for various clients, including Air India and the Saudi royal family. At the peak of its charter work Orient Thai Airlines' subsidiary operated eight Boeing 747s and seven McDonnell Douglas MD80s aircraft.

As of May 2007, Orient Thai Airlines operates scheduled passenger flights to the following destinations of China, Hong Kong, South Korea.

It is too early to say how Udom might want to restructure his OneToGo airline after the Phuket tragedy. To restore its name, the airline needs to disclose all the facts behind the crash and assure further safety measures.

by Suchart Sritama

The Nation

Saturday, September 22, 2007

Second Thai One-Two-Go plane has crash landing

Pilot sent 'mayday' to tower

By Achadtaya Chuenniran and Thai News Agency

The chief pilot of the ill-fated One-Two-Go airliner sent a distress signal to the control tower just before it crash-landed last Sunday, said Pornchai Ua-aree, director of Phuket international airport.

The pilot used a ''mayday'' signal to ask for help just before the plane veered off the runway and crashed into an earth embankment.

Meanwhile, another One-Two-Go flight from Bangkok to Hat Yai yesterday had a minor crash landing, but the pilot managed to control the aircraft.

One of the plane's lights and air-conditioning control panels fell on top of a passenger and oxygen masks also dropped down, airport officials said.

One passenger suffered bruising.

The incident took place less than a week after 89 passengers were killed and 41 injured when One-Two-Go flight OG269 from Bangkok veered off the runway and crashed at Phuket airport.

Sqn-Ldr Pornchai, who briefed a delegation from the National Legislative Assembly (NLA) transport committee about last week's crash, said airport controllers had warned the pilot about gusting winds and rain.

He said the controllers received information [from the pilot] that as the aircraft was about to touch down, its wheels were out, but they did not touch the ground.

He cited the taped conversation between the air traffic controllers and the pilot.

''The chief pilot shouted 'mayday' repeatedly to ask for help until he lost contact with the control tower,'' Sqn-Ldr Pornchai said.

The NLA committee, led by Bannawit Kengrien, yesterday travelled to Phuket to compile information about the crash and visit the injured at Bangkok Phuket hospital.

On long-term measures to cope with emergencies at the airport, he said the airport needed better quality foam to extinguish fires. The foam used to douse the fire last week was not good enough to put the fire out completely, Sqn-Ldr Pornchai said.

He also suggested large, better-equipped hospitals be built near Phuket airport.

Currently, the closest hospital is Thalang hospital, a small hospital that cannot serve many emergency patients, he said, adding the large hospitals are situated far away from the airport.

He said another 50 CCTV cameras would be installed in and around the airport, in addition to the 50 cameras already in place.

The NLA panel also called on the airport to make sure its equipment is well maintained and staff properly trained, he said.

Adm Bannawit said improvements must be made to the airport's rescue capability.

He said the airport still lacked an efficient rescue team and there were no rescue helicopters available.

He said he would pass on complaints about shortcomings in airport rescue work to various agencies.

Adm Bannawit expected all airports under the supervision of the Airports of Thailand to finish installing security cameras by the end of the month.

As for the data recorders which were sent to the United States, he said, the information on the cause of the crash should be made available in a month.

Udom Tantiprasongchai, president of Orient Thai Airlines, operator of the One-Two-Go budget airline, said he had received a report on yesterday's incident which said the pilot had to make a crash landing on the runway to ensure the wheels firmly touched down.

He said it was ''a normal situation'' which happened occasionally and did not suggest the plane was of sub-standard quality. He said officials of the Civil Aviation Department investigated the cause of the accident and had found nothing wrong with the plane.

He said the department had allowed the plane to get back into service.

Monday, September 17, 2007

Bangkok's new airport weathers harsh criticism

Home-truth time for Suvarnabhumi

Published on September 17, 2007

Iata and others offer harsh words of advice to airport's operators

Aviation experts evaluating Bangkok's Suvarnabhumi Airport after one year of operation have said the airport is losing competitiveness due to high charges while still being poor in public services.

They urge authorities to add more capacity, either through a mid-field terminal or a low-cost terminal.

International and local aviation associations as well as airport users were asked to comment on the airport, which will mark its first anniversary of operation on September 28.

According to Albert Tjoeng, International Air Transport Association (Iata) manager of corporate communications for Asia Pacific, general operations at Suvarnabhumi are better than when it opened.

He said signposting had improved and there were more toilets but there was still work to be done before Suvarnabhumi could be a world-class airport ranking among the top 20 airports in the Airports Council International's survey.

These include more signs, redesigning the retail area, installing more toilets and adding more capacity, either through a mid-field terminal or a low-cost terminal.

Tjoeng said Airports of Thailand (AOT) should quickly rectify the remaining deficiencies as well as addressing the outstanding problems identified during the operations and security audits conducted in April this year.

AOT has reassured Iata that it is addressing these findings in consultation with the International Civil Aviation Organisation (Icao).

Regarding the airport's competitiveness, Iata was critical of the unilateral 15-per-cent increase in landing/parking charges, along with increases in other airport charges in April. The concession fees levied by AOT on ground-handling companies are being passed on to airlines.

The total turnaround costs at Bangkok are higher than at Kuala Lumpur or Singapore for various aircraft types, so airlines pay more than at Kuala Lumpur or Singapore and yet get worse service.

Moving forward, AOT needs to establish an effective consultation process with Iata and the airlines to reach a long-term charges agreement to be in line with international best practices, Tjoeng said, and AOT needs to take steps to improve cost efficiency to ensure that its own expenses and investments are cost efficient.

Productivity improvements, lack of wasteful investment and optimal procurement policies are important to keep costs to a minimum: "Airlines should not be burdened with additional costs due to poor planning, compensation issues, repair costs arising from defects at the airport, duplicated services as a result of operating two airports, and the other mistakes of AOT," he added.

Iata is also opposed to AOT's suggestion of a noise charge on passengers and airlines. Airlines and their passengers cannot be made responsible for measures aimed at alleviating noise when they have had little or no influence on the location of airports or on the land-use policies in the vicinity of an airport.

The charge would increase the cost of operations without addressing the core issue, he noted, suggesting instead that AOT fund any compensation from its own finances.

Icao's balanced approach should also be adopted by having an effective land-use policy, reducing noise at source, and implementing noise-abatement air-traffic-control procedures, he said.

Tjoeng also commented on the use of two airports, saying Iata continued to advocate a single airport as the preferred long-term solution if Bangkok was to be a strong aviation hub in the region. "Having two airports splits the passengers, airlines and AOT's resources and leads to lower cost-efficiency and inconvenience for passengers."

Hence AOT should urgently inject additional capacity at Suvarnabhumi by building either a mid-field terminal or a low-cost terminal. If the decision is to operate two airports, then it is critical that there be a level playing field for all airlines. "All carriers should be given the choice of where they wish to operate from. Airport charges should be transparent and accurately allocated, and there should not be any cross-subsidisation between the two airports."

Brian Sinclair Thompson of the Board of Airline Representatives at Thailand said newly opened airports generally had many problems.

Yet he noted that Suvarnabhumi Airport's capacity was already full, so that airline operators were urging the government to develop a third terminal in order to meet higher demand.

"The airlines want to see further investment at the airport next year when the new government is established," said Thomson, adding that AOT itself needed to solve internal problems, especially the search for a new leader.

Thomson also said Bangkok should have a single airport, Suvarnabhumi, and must attract users with low charges.

"AOT is focusing on increasing revenue, unlike many busy airports such as London's Heathrow, which receives charges worth 15 per cent of total revenue," he said.

Yongyut Lujintanon, Cathay Pacific sales and marketing manager for Thailand and Burma, said the overall operation had improved, particularly in infrastructure, while people working at the airport were now familiar with the new place.

The airport's vision of being an aviation hub was still unclear, he said, though in spite of poor policy, many airlines were waiting to broaden their network or add flights into Thailand.

Suchat Sritama

The Nation

Sunday, September 16, 2007

Thai jet crashes on Phuket with death toll climbing

A Thai airliner carrying about 128 passengers has crashed and broken in two as it attempted to land during bad weather at Phuket airport in the south of the country.

A local official said that at least 30 people are likely to have been killed in the crash.
A rescue effort was underway and the plane was believed to still be on fire.

The MD-80 plane, operated by budget carrier One-Two-Go, was flying to Phuket from Bangkok.

"The plane then fell onto the runway and broke into two. It is expected that there will be deaths," Chiasak Angkauwan, a civil aviation official, told Thai television.

The airplane asked to land but due to the weather in Phuket - strong wind and heavy rain - maybe the pilot did not see the runway clearly," he said.

"We are rescuing people from the aircraft ... we know now there were 123 passengers and five crew," he told the news channel.
"We won't know what really happened until we hear the black box."
Lieutenant Major Sokchai Limcharoen, a police chief in the Phuket area of, said the plane crashed at 3:35pm (0835 GMT).
"The plane was landing and slid off the runway. We are rescuing people and carrying injured people to hospitals," he said, adding that the plane was on fire.

Saturday, September 1, 2007

Bangkok Aviation Fuel Services revises up revenue forecast on higher Suvarnabhumi demand

Bafs revises up revenue forecast on higher Suvarnabhumi demand


Bangkok Aviation Fuel Services Plc (Bafs) has revised up its 2007 revenue projection by more than 15% following higher-than-expected service volume at Suvarnabhumi Airport. The company now expects to earn between 1.84 billion and 1.91 billion baht, up from 1.6 billion forecast previously. Last year its revenue was 1.53 billion baht.

Earlier, the aircraft refuelling service provider predicted volume would expand 5% from 4.27 billion litres last year.

But volume will likely rise 7.5% to 4.58 billion litres as its combined uplift volume at Don Muang and Suvarnabhumi airports in the first six months has jumped 7.5% year-on-year to 2.27 billion litres.

''Service volume in the second half could repeat the growth rate in the first half because of seasonal reasons. Normally, the peak tourist season in Thailand and elsewhere lasts from the fourth quarter to the first quarter,'' said M.R. Supadis Diskul, the managing director of Bafs.

''It's good news for us to hear that about 20 airlines would add over 100 flights per week to Thailand from October to March to serve tourist demand. In addition, we expect operations of Air Bagan of Burma, Air India express and charter flights by Sky Star, the newcomers at Suvarnabhumi Airport, would benefit our performance despite their small business scales,'' said M.R. Supadis.

Starting on Oct 1, Bafs plans to charge clients for depot and hydrant fees in Thai baht terms, aiming to better manage foreign-exchange risks.

M.R. Supadis said the company's net profit fell by three million baht each time the baht strengthens one baht against the US dollar.

Bafs' service fee at Suvarnabhumi would rise to 46 satang per litre from US$0.05 gallon. At the same time, the charge at Don Muang Airport would change to 55 satang per litres from around $0.027 per gallon, noted M.R. Supadis.

He said the company made deals with oil companies and clients to fix foreign exchange rates for its revenue at Suvarnabhumi Airport at 34.88 baht to a US dollar and 34.71 baht at Don Muang.

''We won't change our fixed foreign-exchange rates despite the baht depreciation in the future to operate fair businesses with our clients and jet fuel suppliers,'' said M.R. Supadis.

However, oil companies that are Bafs customers could choose to pay some fees with either dollars or baht.

''The alternative would help our clients compete with their common rival, Aircraft Service International Group (ASIG), effectively at both Don Muang and Suvarnabhumi airports,'' said M.R. Supadis.

''This financial policy could decrease our income unless we earn more from growing our uplift volume. The change results in a reduction of our service fees by 3%. However, better risk management is our foremost advantage.''

Bafs reported a first-half net profit of 315.8 million baht on sales of 1.13 billion baht. Second-quarter net profit rose 51.5% year-on-year to 153.2 million baht, on sales of 544.5 million, up 85.3%.

The company's net profit margin in the second quarter fell slightly year-on-year to 28.1% from 34.4%.