Monday, July 7, 2008

Nok AIR cuts local routes, management salaries to reduce costs

Published on July 5, 2008

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.

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