Thursday, July 24, 2008

Nok Air Latest Thai Carrier to Scale Back Operations

Reflecting the ongoing escalation of fuel costs and inflation, Nok Air announced that it was cutting back both its fleet of aircraft and its staff. In an attempt to survive the recent fuel hikes in Thailand, flights were being reduced by 25 per cent and unprofitable routes dropped altogether.

Just as Thailand’s low-cost carriers were picking up steam, the global price of oil has brought them crashing back to earth. Nok Air is the latest budget airline to downsize its operations to help cope with the fuel hikes.

As oil reached US$146 a barrel, Nok Air CEO Patee Sarasin said the airline could no longer absorb the impact of these high prices. “Every single dollar increased per barrel of oil is adding up to five million baht on our operation cost,” he stated.

To help the popular Thai budget carrier survive, Sarasin said that shareholders and board members of the company had approved a survival package which is now in effect. Under the new plan, all staff of Nok Air will have their salaries cut by 20 to 25 per cent, even pilots and supervisors. Nok Air will also cut back its flights from 108 to 73 per week, and operate only from its most profitable domestic routes: Chiangmai, Udon Thani, Hat Yai, Trang and Nakhon Sri Thammarat.

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