Thursday, July 31, 2008

Thailand's airlines facing difficult times

Thailand, one of Southeast Asia's most competitive markets for low-cost airline operations, is undergoing a period of major change as high fuel prices and weakening demand force much-needed restructuring.

The biggest change of late has been the recent grounding of domestic low-cost operator One-Two-Go. It claimed it was due to a need to restructure financially but Thai authorities insist it was a forced grounding due to preliminary findings of concern from the ongoing investigation into a fatal crash at Phuket a year ago.

A forced grounding or one that was coming anyway as a result of financial woes, One-Two-Go and most other Thai airlines have been facing troubled times of late, requiring quick corrective action. It is something they are not used to the country's three low-cost airlines - the others being Nok Air and Thai AirAsia - had all seen generally good times in terms of traffic growth since their launches in 2003 and 2004. The market has roughly tripled in size since then, from around 4 million passengers annually to more than 12 million.

In the weeks before its grounding, One-Two-Go had already parked some of its Boeing MD-80-series aircraft to help it cut costs. It said it was because of high fuel prices and weak economic conditions in Thailand that were impacting demand.

Udom Tantiprasongchai, chief executive of One-Two-Go's parent Orient Thai Airlines, told Airline Business sister publication Air Transport Intelligence that the carrier had been reducing operations "because the economy is so bad".

He said fuel price hikes had hit airlines in Thailand particularly hard as the country's carriers have to pay value-added tax on fuel, unlike in some other countries. But he also said the carrier will return some of its grounded aircraft to service when the peak tourist season begins later in the year. On its website it says it hopes to be flying again in September.

One-Two-Go is not the only Thai carrier that has radically reduced operations in recent weeks, however.

Nok Air, which is 39%-owned by national carrier Thai Airways International, has also been cutting back as a result of losses. It recently suspended its only international service, from Bangkok to Hanoi in Vietnam, and suspended services on several domestic routes. It also reduced frequency on many other domestic routes and will be reducing the size of its fleet.

The carrier, which has nine Boeing 737-400s and one ATR 72, is seeking to wet-lease aircraft out to other operators as a result of its cutbacks. It recently agreed a deal to wet-lease to Myanmar Airways International a 737 for international services between Yangon and both Bangkok and Kuala Lumpur. MAI had previously been wet-leasing an MD-82 from Orient Thai but this deal ended when its One-Two-Go unit was grounded.

Nok chief executive Patee Sarasin, a former advertising industry executive turned airline boss, told local media recently that if oil reaches $170 a barrel "I am better off selling noodles" - a joking reference to the fact that he owns a noodle restaurant in Bangkok.

The Sydney-based Centre for Asia Pacific Aviation says that "Nok's outlook is tenuous", adding in jest that as food prices have also been going up "Patee Sarasin might have just as much trouble selling noodles".

Analysts say one of the problems facing Thailand's low-cost carriers is they have focused so heavily on winning market share in the domestic market, which is particularly price sensitive. This has made it difficult for them to pass on higher fuel costs through increased fares as this has a particularly harsh - and immediate - effect on demand.

Thai domestic market 2008-2004
Airline
ASK share August

2008

2007

2006

2005

2004

Thai Airways

52.8%

41.9%

44.9%

53.6%

59.2%

Thai AirAsia

23.2%

17.0%

13.4%

10.1%

8.1%

Bangkok Airways

15.1%

10.5%

11.9%

13.7%

11.1%

Nok Air

6.8%

14.1%

17.7%

10.6%

7.3%

Orient Thai/One Two Go*

0.8%

15.4%

10.3%

9.5%

9.2%

Others

1.4%

1.0%

1.7%

2.6%

5.1%

NOTE: *Orient Thai and One Two Go Airlines missing data for 2008.
SOURCE: Innovata.

"The Thai domestic market is small and a big portion is transfer traffic from Bangkok which they can't get," says Mark Webb, a Hong Kong-based airline analyst. "It's hard to see how anyone makes money on it."

Nok and One-Two-Go have faced particularly tough times as they now rely exclusively on domestic operations (although One-Two-Go's parent Orient Thai operates limited international services).

Malaysian low-cost carrier AirAsia's 49%-owned Thai associate, Thai AirAsia, has also been losing money as a result of market over-saturation. Analysts have generally been critical of the carrier and its continuing weak financial state when compared to that of the main Malaysian operation, although some say it is in a somewhat better position than its rivals within Thailand as it also focuses on international services to better balance things.

AirAsia group head of finance Rozman Bin Omar says he sees things eventually turning better in Thailand as well as in Indonesia, where it has another 49%-owned associate carrier.

"Recently there have been some shake-ups in the industry in Indonesia and Thailand with some airlines cutting back capacity and even closing down," he says. "This bodes well for our Indonesian and Thai JVs. We remain strong in these two markets and our position will be even stronger as we replace the older 737s with the new Airbus A320s."

Full-service carrier Bangkok Airways, meanwhile, says it is not making cuts to domestic routes as a good portion of its traffic is feed from international services. It focuses more on this higher-yield traffic, much of it from foreign connecting passengers, and links several resort destinations. Analysts say this puts it in a better position than the budget carriers but they note that political instability could impact inbound tourism and in turn affect Bangkok Airways as well.

The airline says it is making some international route cuts to help it deal with increases in fuel prices, but stresses that this will enable it to allocate capacity elsewhere where demand is stronger. It adds that it will be suspending services between Bangkok and Shenzhen in China on 15 August and suspending services between Bangkok and Fukuoka in Japan on 1 October. In addition, Bangkok Airways will reduce frequency between Bangkok and Hiroshima in Japan on 1 October to two flights per week from three.

"Everyone has to tighten their belts now," says Bankgkok Airways. "We are going over all the routes that make the least money and we will adjust our network as we need to. But we are looking to increase our flights in other areas and we will announce those when they are ready."

Thai Airways, meanwhile, relies more than most other Thai carriers on international traffic, including those transferring to its domestic flights which it scaled back radically several years ago.

However, it too has been making international network cuts as a result of rapidly eroding earnings. It recently said it would sell its ultra-long-range Airbus A340-500s and has dropped non-stop services from Bangkok to New York. Bangkok-Los Angeles will also be switched to one-stop services soon and the carrier has reduced the frequency of services to several other international destinations.

Thai says that despite continuing increases in revenues, yields have been falling as its ticket and fuel surcharge hikes have not been able to keep up with fuel price rises.

Thai domestic market 2008-2004
Airline
Weekly seats available August

2008

2007

2006

2005

2004

Thai Airways

135,001

132,598

142,598

155,019

162,682

Thai AirAsia

54,552

50,820

38,962

26,866

22,344

Bangkok Airways

46,699

40,671

45,937

49,320

36,110

Nok Air

17,324

44,349

57,567

29,800

20,860

Orient Thai/One Two Go*

1,800

45,732

32,760

26,740

23,684

Others

4,880

4,354

6,352

8,890

17,116

NOTES: *Orient Thai and One Two Go Airlines missing data for 2008.
SOURCE: Innovata.

Analysts say Thai's business model, which is focused largely on long-haul leisure traffic, leaves it at a disadvantage in the current environment to other Asia-Pacific flag carriers. Singapore Airlines, for example, focuses far more on high-yield business traffic, which allows it to pass on fuel price hikes to passengers more easily.

Thai's board is increasingly concerned about the carrier's deteriorating financial state. In June, at a tense board meeting at which directors discussed how the national carrier is in "crisis" due to rising costs, president Apinan Sumanaseni was abruptly stripped of his management powers, which at Thai is the equivalent of being sacked.

The airline's chairman stepped in and managed to convince several fellow board members to reconsider the move and Apinan was promptly reinstated. But whether he will survive another ousting attempt by board members opposed to him remaining in the job is still in question.

The carrier said in a stock exchange announcement that Apinan will from now on be under "close monitoring by the board of directors". With the market undergoing such a dramatic period of uncertainty, this is probably something all other airline boards in Thailand are doing with their top managers as well.

Tiger hunts Asia, wants fleet of four to be 30

TIGER Airways Australia will lobby the Federal Government to allow it to fly internationally, with its sights set on Malaysia.

Speaking at the Asia Pacific Aviation Summit in Sydney, Tiger's new managing director, Shelley Roberts, said she would make representations to the Federal Government as part of its white paper on aviation policy.

While Tiger's international group flies in and out of Perth and Darwin, Commonwealth legislation states that domestic carriers must have majority Australian ownership to fly internationally.

"I am a bit perplexed that while my competitors are able to expand overseas … I am denied from growing my airline," Ms Roberts said.

"I can't see how it is in the interest of Australia to not allow Tiger to expand while others are reducing their capacity."

Ms Roberts and Tiger Airways Group chief executive Tony Davis said budget carriers were able to prosper during difficult times in the aviation industry because of their low cost base.

Ms Roberts said Tiger would embark on a swift growth strategy, and planned to have 30 aircraft in Australia within five years.

Last week Tiger announced that three new aircraft would be added to its Australian fleet of four by the end of the year.

Ms Roberts said the routes that those aircraft would fly and the location of Tiger's second Australian base would be announced "imminently".

Mr Davis told the summit that Malaysia would be one of the key destinations for Tiger if the Government granted it rights to fly internationally.

"Low-cost carriers have to grow, have to expand and now is the best time," he said.

"History has shown that our model is more resilient during times like this."

That has not proved to be the case, though, with Ryanair, which pioneered the low-cost airline on which Tiger is closely modelled.

The first-quarter profit for Europe's largest discount airline has plummeted 85% due to the high cost of fuel.

Net income dropped to €21 million ($A34.5 million) for the quarter ended June 30 from €138.9 million during the same period last year.

Ms Roberts said Tiger would soon announce a bottom-line profit for the group for last financial year.

Fire on Vietnam Airlines jet in Japan: official

TOKYO (AFP) — A fire broke out Wednesday from the engine of a Vietnam Airlines passenger plane after it landed in Japan, but no one was injured, the transport ministry said.

An air traffic controller detected smoke coming out of the right engine of the Boeing-777 at 7:41 am (Tuesday 2241 GMT) as it landed at Narita airport near Tokyo, transport ministry spokesman Fumio Shishiro said.

The plane, which had arrived from Ho Chi Minh City, taxied to the terminal and let passengers disembark, after which plumes of white smoke billowed out of the engine, television footage showed.

Around an hour after the passengers had exited, a fire broke out but it was doused by firefighters who were on standby, he said.

"There was a slight smell as if the engine was burning," a male passenger told NHK television.

Police were investigating the cause of the fire, Shishiro said.

None of the 264 passengers and 13 crew were injured, the official said. Airport officials closed part of the runway but reopened it later, he said.

Vietnam Airlines said in a statement that the crew of flight VN 950, while taxiing at Narita, "discovered the alarm signal showed that the temperature had exceeded the limit, and there was smoke at the right engine number two."

"The crew performed technical steps following procedures," the Vietnamese-language statement said.

"When the alarm signal on the plane went back to normal, the pilot continued to taxi the plane to the pier and the passengers went to the terminal normally."

Narita airport used a firefighting truck to tackle smoke still coming from the engine as the plane sat at the terminal, the statement added.

The airline and airport authorities are investigating the cause of the incident, Vietnam Airlines said.

DMIA gets 14 daily flights to Thailand

By Reynaldo G. Navales
Diosdado Macapagal International Airport (DMIA) here is expected to grow after the success of the recently concluded RP-Thailand Air Talks where Clark got 8,600 seats.

Clark International Airport Corporation (Ciac) president Victor Jose Luciano, who is a member of the RP Air Panel that attended the RP-Thailand Air Talks in Bangkok last July 24 and 25, said DMIA in Clark Freeport got the biggest air deal with 8,600 seats.

Arroyo Watch: Sun.Star blog on President Arroyo

Thailand will get reciprocal seat entitlements of 8,600 for the Clark route, bringing the total number of seat entitlements to 17,200 seats weekly or 14 flights daily.

"This is a great step for DMIA in bringing more tourists in the Northern and Central Luzon as the airport is on its way of becoming the country's premier gateway," Luciano said.

He also said that part of the air deal, cargo capacity at DMIA will be boosted from zero to 700 tons weekly, adding that there was no limitation on airline designation.

This means even non-flag carriers can fly there from multiple designations.

The air agreement also allowed other carriers not limited to Clark. Manila airports got 5,400 seats from 2,930 with cargo allocation of 300 tons from more than 200 previously.

Other airports outside Clark and Metro Manila were given allocations of 2,110 seats from their previous 850 seats.

Air Traffic at DMIA is also expected to boost further after Cebu Pacific Airways had revealed plans to operate at the 2,500 hectare Civil Aviation Complex via Clark-Bangkok and Clark-Hong Kong routes.

Cebu Pacific is also planning to operate other destinations in Clark, which includes Macau, Singapore, and Taiwan making the former US facility as their hub in the Northern Luzon area.

Korea's Asiana Airlines last July 22 started their Clark-US routes every Tuesdays, Thursdays and Saturdays at 1:10 p.m. and will arrive in Incheon in South Korea at 5:05 pm.

These will connect with Asiana's international flights to Los Angeles and New York every Tuesdays and Thursdays and to Chicago every Saturdays.

Asiana's flights have increased to 10 flights per week from their previous seven flights per week. Asiana's flights at DMIA use an AirBus 320 with a capacity of 142.

Other airlines operating at the airport include Tiger Airways of Singapore via Clark-Singapore-Macau routes, Air Asia of Malaysia via Clark-Kuala Lumpur and Clark-Kota Kinabalu.

Wednesday, July 30, 2008

Batavia Air founder may sell family-owned business if buyer is right, MD says

Karen Yap in Kuala Lumpur

Batavia Air may be put up for sale by its founder, Yudiawan Tansari, as he plans to take a backseat from his illustrious career in the air travel industry, his daughter Alice Tansari told mergermarket. Batavia Air is a budget carrier in Indonesia with flights to around 30 domestic destinations and international services to Malaysia and China.

”If my father sells, he will sell 100%, not 49% or 51% because he once said that having shareholders would inevitably invite arguments,” said Alice Tansari, who is the company’s managing director. ”If he gets along with the buyers, he would sell to them. It is not about the money as we are not in distress or desperate to sell, it is about relationships.”

She said the funds from the sale would be used to invest in other businesses. ”My father is not retiring from the industry. He just needs to take things slow. He has not taken a holiday for five years. It is a challenging job running an airline, we wake up everyday at 5am and only see our beds at midnight.” She welcomed proposals or talks with interested parties. No financial advisers have been appointed yet for the sale plan.

Operating from Jakarta’s Soekarno-Hatta International Airport, Batavia Air is fully-owned by the Tansari family. Yudiawan, 56, founded Batavia Air in January 2002 after more than two decades in the travel services industry. In 1973, he formed PT Setia Sarana Tour & Travel, a travel agency located in Mangga Besar, known as Batavia’s old town, which later gave rise to the official name of his budget carrier. His three children - two daughters and a son - help him run the business and sit on the company’s board.

In 2007, Batavia Air made a net profit of USD 6m and has an average load factor of between 85% and 90%, she said. The budget airline carried 7.5 million passengers last year, and expected no increase in passenger traffic this year due to the higher costs of travelling. She added if global oil prices stayed less volatile, domestic passenger traffic was expected to increase 5% a year.

The budget carrier had incurred debts amounting to USD 10m from loans and financing for working capital and plane orders. Jet fuel amounts to 50% of Batavia Air’s operating costs, she added. Currently, Batavia Air has a fleet size of 25 planes of narrow-body Boeing 737s, which are 140- and 170-seater aircraft. Of the 25 planes, 12 are owned, three in the process of lease purchase, and the remaining 10 are on lease.

When asked about Batavia Air’s survival in the backdrop of sky-rocketing jet fuel prices, she said, ”our chances of survival is high because we are flexible and adaptable. The need for travel will always be there due to Indonesia’s vast landscape and unreliable sea transportation.”

Two years ago, Yudiawan was interested in selling the budget carrier for USD 300m [including aircraft, building and spare-parts assets and no debt obligation] and was approached by local investors, she said. But talks collapsed as the interested parties wanted to only purchase 40% to 50% stake in the carrier. ”My father even told them that he would help them for three years [after the sale] to transition the company.”

Budget carriers in emerging markets such as Indonesia and Thailand were expected to see more consolidation, according to Shukor Yusof, an aviation analyst from Standard & Poor’s Equity Research in Singapore. He told this news service that budget carriers in such markets would also see very high bankruptcy potential.

”Jet fuel accounts for at least 40% of low cost airlines’ operating costs and it is the single biggest item on their balance sheet. Budget carriers by definition are not designed to work when oil is at USD 130 a barrel, therefore the impact is severe. Of the six to seven airlines that have gone bust in the first six months of 2008 in the US, almost all were low cost carriers [LCCs]’.”

He added that if oil touched USD 200 a barrel, ”my guess is that none of the low cost carriers will exist. They would still be able to make ends meet if oil prices is around USD 100 to USD 110. The full-service carriers could be interested in the LCCs only if there is a fire sale.”

On 25 July, spot dated brent crude oil was priced at around USD 126.40 per barrel

AAAE Delivers Training To Asia-Pacific Region Through Agreement With The Guam International Airport Authority

ALEXANDRIA, Va., Jul 28, 2008 (BUSINESS WIRE) -- The American Association of Airport Executives (AAAE) and the Guam International Airport Authority (GIAA) have successfully completed the first of three training courses planned for 2008 at the Guam International Airport.

The Basic Airport Safety and Operations Specialist School was held July 14-16, 2008 at the training facility provided by the Guam International Airport in Tamuning, Guam. The course was taught by Jeff Price and had a total of 33 attendees from throughout the Pacific Asia region. The course covered subjects such as an overview of 14 CFR Part 139 and the Airport Certification Manual (ACM); Personnel training and recordkeeping requirements; Self-Inspection Program; Pavement ratings; Markings, Signs and Lighting; Obstructions-Navaids; Hazmat; Public Protection; Construction on Airports; Wildlife Management; ARFF and the AEP and Emergency Management and Incident Command.

AAAE's instructors are drawn from a pool of experts from around North America and have diverse backgrounds and experience. AAAE's instructors include college and university professors, active airport management personnel and aviation consultants. The instructors AAAE employs are dynamic and interactive. AAAE's Training Department staff members also maintain a working knowledge of key course subjects, including aviation security and airfield operations, to help maintain the quality of its course offerings.

Providing quality aviation training to the Asia/Pacific region is one of the many initiatives included in an agreement struck earlier this year between both organizations. The deal also includes the creation of the International Association of Airport Executives-Pacific (IAAE-Pacific) affiliate.

The other initiatives set forth by the organizations is to work to create a IAAE - Pacific member base in region, to establish an accreditation program and regional training academy in the region and to help IAAE/AAAE and the GIAA become recognize as a leader in airport training in the Pacific region.

Future training courses and international conferences in Guam include the Advanced Airport Safety & Operations Specialists training course, which is scheduled for October 2-4, 2008 and will be followed by AAAE's Third Asia Aviation Issues Conference scheduled for October 5-7, 2008. The final training scheduled for 2008 is the Aviation Security for Law Enforcement Officers Training and Airport Security Coordinator course that is scheduled for early December.

For more information about the upcoming training, IAAE-Pacific membership or program information please contact AAAE's Will James at wjames@aaae.org or 703-824-0504, or GIAA's Rolenda Faasuamalie at rolenda@guamairport.net or 671-646-0300.

ABOUT AAAE: Founded in 1928, AAAE is the world's largest professional organization representing the men and women who work at public-use commercial and general aviation airports. AAAE's 5,000-plus members represent some 850 airports and hundreds of companies and organizations that support the airport industry. Headquartered in Alexandria, Va., AAAE serves its membership through results-oriented representation in Washington, D.C. and offers a wide range of industry services and professional development opportunities including training, conferences, and a highly respected accreditation program.

SOURCE: AAAE

AAAE
Sean Broderick, 703-824-0500, Ext. 126
sean.broderick@aaae.org
 

THAI's recipe for success

Airline sees export potential for its baked goods at lower prices


Boonsong Kositchotethana


THAI catering specialist Odd Gunnar Engebretsen (left) and director Chumpot Mintarkhin show off the array of THAI's baked offerings.

Rolls, baguettes, croissants, breads, pastry and cakes do not necessarily need to come from France or another European country in order to be yummy.

That is exactly what the Catering Department of Thai Airways International (THAI) is trying to prove to the world, that goods from its bakery house at Don Mueang International Airport in Bangkok can be perfectly tasty and even cost much less.

The flag carrier is making impressive strides to create an overseas presence for its bakery products, making them available at airline caterers and retail shops, as part of its new business development campaign.

It seems to have made a good start as the Japanese unit of Gate Gourmet, the world's largest independent provider of airline catering and provisioning services, has agreed to source frozen bread, mostly butter rolls, from THAI.

The deal involves the shipments of some three million rolls, worth about 10 million baht, over a three-year period by sea to Gate Gourmet Japan's facilities at Narita International Airport.

These Thai-made rolls go to the trays of the inflight meals that Gate Gourmet delivers to its nine of its international carrier clients that offer services through Narita, including Continental Airlines and Turkish Airlines.

"They (Gate Gourmet) told us the taste of our bread is good, the texture is right and overall quality is up to the high European standards," said Odd Gunnar Engebretsen, the catering service specialist at THAI.

The Norwegian executive, who is marketing THAI's bread and food overseas, said THAI's rolls served as a good substitute to the bread Gate Gourmet Japan previously sourced from Germany and Poland and from local Japanese bakery houses.

THAI's shipments offer a 10-20% cost saving for Gate Gourmet Japan compared to the cost if they were to be sourced from Europe, and up to 50% for Japanese-made offerings.

"Bread [making] culture is not there in Japan," noted Mr Engebretsen, a veteran of the airline catering business. "Thais are better at this area."

Mr Engebretsen is now pursuing more contracts with at least five other airline catering firms in Asia; namely, Gate Gourmet Hong Kong, LSG Sky Chefs subsidiaries in Hong Kong and South Korea, Cosmo Japan, and Evergreen Sky Catering in Taiwan. LSG Sky Chefs is part of the German airline Lufthansa AG.

Chumpot Mintarkhin, a director at THAI's Catering Department, said Gate Gourmet Japan was pleased with the initial three shipments of THAI's frozen rolls, numbering more than 600,000, and indicated a possibility of ramping up a volume purchase.

THAI is also working to market its bakery products for general Japanese consumers through wholesalers under bulk sales, Mr Engebretsen added.

Mr Engebretsen said the exports of THAI's bread could potentially reach seven million pieces this year, valued at some 20 million baht.

The export drive is contributing to THAI's bid to revitalise its extensive catering facility at Don Mueang whose works have substantially reduced following the opening of the airline's new 3.68-billion-baht facility, which can produce 87,000 meals per day, at Suvarnabhumi Airport in September 2006.

Opened after the airport shift, Bakery House, the airline's bakery facility at Don Mueang, which covers a total area of 14,500 square metres, is underutilised. Bakery House now produces nearly three million pieces a month, compared to its monthly capacity of six million.

Part of Bakery House's production is sent to THAI's Suvarnabhumi catering facility, for uplifting at Don Mueang airport, which serves limited domestic flights, and to THAI's own 28 Puff & Pie retail kiosks, 29 wholesalers and airport lounges of THAI and other airlines.

Tuesday, July 29, 2008

Tourism Authority of Thailand targets Affluent Chinese Visitors

The Tourism Authority of Thailand recently launched a new campaign called ‘Wonderful Thailand 2008’, which targets high-spending Chinese tourists to the Kingdom. Select Chinese media have been invited to experience the high-end tourism offerings and attractions of Thailand in Bangkok, Chiang Mai and Phuket, with the hope that these invited visitors will spread the news about Thailand’s top class tourism offerings to more affluent Chinese visitors back home.

The campaign, with support from Thai Airways International and TAT's Beijing Office, showcases Thailand’s top quality tourism products and services. Invited press members will have a chance to spend their nights in five-star hotels in Bangkok and experience boutique resorts and qualified tourism offerings and tailor-made products in Phuket and Chiang Mai, including spas and other health care and health-related products and services.

According to TAT’s Governor, Mrs. Phornsiri Manoharn, TAT is trying to eradicate low-priced package tours from China, and has come up with new initiatives to attract higher spending Chinese visitors to Thailand. There are currently 50 travel agencies in China recommended by TAT for tourists to arrange their trips.

“It might sound very controlled but we really need to maintain our standards,” said Mrs. Phornsiri Manoharn, TAT’s Governor, revealing that each package tour for high-spending tourists that these operators organize cost 9,000 Chinese Yuan or around 50,000 Baht, and these tourists will tend to spend more during their stays.

As soaring oil prices create an impact on the travel industry in general, possibly hurting the longer-haul markets, TAT has turned more of its attention to nearby Asian markets.

Ms. Eumporn Jiragalwisul , TAT’s Director, East Asia Market Division, said, “After a series of meetings with local land operators and China’s tour operators, the zero-dollar tour problem has been fully addressed and the situation is improving. Meanwhile, TAT is specifically emphasizing on promoting Thailand in the Chinese market.”

In March this year, a mega-familiarization trip was organised and invited operators had a chance to experience new travel routes to offer to their clients. In June, to tap the potential of China’s second most populous province, TAT signed a Memorandum of Understanding (MoU) with the Shandong Provincial Tourism Administration (SPTA) to work within a framework of friendship and closer tourism co-operation.

Last year, Chinese visitors to Thailand reached over a million for the first time, making it the fourth largest Asian market after Malaysia, Japan and Korea. The first five months of 2008, 20 years after Thailand was first promoted in China in 1988, has already confirmed some substantial growth from the market. While TAT aims high for quality visitors, it also expects tourists from Mainland China to surpass all countries and become the largest market for Thailand within three years.

The number of repeat visitors from China is also improving from only 20% many years ago, compared to 80% from the European market, to a satisfactory 40% currently. An increase of 50% is likely to happen by 2009

Vietnam Airlines launches new Hanoi-Dong Hoi flights

Earlier this week Vietnam Airlines launched its new Hanoi-Dong Hoi flight route and is offering a special discount on the route for a limited time only.

Vietnam Airlines is offering a 25 percent discount from July 18 to September 30 as a special promotion.

The carrier will operate three flights per week on Monday, Wednesday and Friday, according to Viet Nam News.

Myanmar int'l airline to resume flight with alternate aircraft

YANGON, July 28 (Xinhua) -- The Myanmar Airways International (MAI), the sole national flag carrier, has resumed normal flight with a newly-hired aircraft as an alternate arrangement after its former aircraft was stopped flying Bangkok's new international airport, local private media reported Monday.

The 150-seat aircraft of the type of Boeing 737-400 was hired from the Thai-based NOK airline and the MAI's flight operation has resumed since Friday, the Voice quoted the MAI sources as saying.

MAI's former aircraft of MD-82, which was hired from Thailand's Orient Air, was barred from flying over Bangkok Suvarnabhumi new airport since Wednesday for having instances that the aircraft crashed recently near Phuket coast as cited by both Thai and Myanmar civil aviation authorities as well as having premium issue, the report said.

Earlier, the MAI once also hired Airbus-319 from Bhutan's Druk Air and has been flying under code-sharing systems with Singapore's Jet Star, Malaysia's MH and Thailand's TG for Yangon-Bangkok and Yangon-Kuala Lumpur routes, the report added.

MAI is a joint venture between the state-run Myanmar Airways and the Region Air of Singapore set up in 1993 for sole international service covering flight destinations of Bangkok, Kuala Lumpur and Singapore.





Vietnamese miracle begins to run out of fuel for Vietnam Airlines

The surge in jet fuel prices, a stock market plunged into crisis and outright panic among foreign investors are set to derail plans to privatise Vietnam's largest airline.

The sale to foreign investors of between 10 per cent and 20 per cent of Vietnam Airlines has been on the cards this year, but industry sources have told The Times that it is now unlikely to happen before 2009. If the Vietnamese economy continues to writhe in its current agony, it could be postponed even further.

Despite strong passenger numbers and bullish ambitions in line with Vietnam's recent economic miracle, the airline's bottom line has been battered by fuel costs, which soared nearly 40 per cent beyond the company's forecasts. Plans for the airline to run direct flights to the United States are thought to be in jeopardy and this month the group reported a first-half loss of $5 million (£2.5 million).

The Vietnam Air privatisation was to have involved a slice of the Government's stake being sold to three or four strategic investors from overseas. Foreign investors have already walked away from previous Vietnamese privatisations because of rules that forced them to agree to buy stakes before a price was known.

The expected delay to the privatisation of Vietnam Airlines comes as the lustre on the country's recent economic boom has begun to fade. Fund managers with significant portfolio exposures to Vietnam say that the past few months have been dreadful. One described the collapse in the stock market as a timely reminder of the meaning of risk in emerging markets.

Rumours abound among brokers in Singapore that at least three substantial foreign hedge funds have been stung by a liquidity trap that has left them unable to exit stock and currency positions that have turned heavily against them.

The difficulties experienced by Vietnam Airlines, observers say, highlight some of the vulnerability of the country's stratospheric economic story. The carrier's revenues in the first half of 2008 were nearly 30 per cent higher than at the same period in 2007 as business travel and cargo use soared. The business model has unraveled because of Vietnam's lack of big energy resources.

The same is true at a national level. Vietnam's exports remain exceptionally strong, despite fortunes fading elsewhere in Asia, but the January-July trade deficit doubled to $15.01 billion because of the cost of imported oil. Vietnamese inflation is running at 27 per cent and many economists believe that it could touch 30 per cent by the end of the summer. Interest rates have been raised three times this year and a further tweak is expected. Robert Prior-Wandesforde, an HSBC economist, has said that monetary policy authorities will have to act soon if the country is to regain the credibility that it has lost over recent months.

The Government is also likely to face a prolonged, financially draining struggle to support its currency. Traded on a vigorous black market, the dong has come under intense downward pressure from speculators. Government resolve to avoid the sort of currency implosion that triggered the 1997 Asian crisis could lead to its foreign reserves being reduced to nothing by repeated intervention.

A more striking sign of that drop in credibility has been the main stock market index's plunge of more than 55 per cent of its value since its peak last Autumn. A lot of recent bank lending in Vietnam has been collateralised with shares and property prices are sinking fast.

Some of Vietnam's other vulnerabilities have also emerged of late. Where once it was a much-favoured destination for Japanese foreign direct investment - particularly factory-building - suddenly circumstances have changed. Rising construction costs and materials prices, for example, persuaded Nippon Light Metal to pull out of plans for a huge aluminium hydroxide plant, which was to have opened in 2011. On Friday, Sony, the electronics giant, said that it was closing a factory producing televisions principally for the Vietnamese market.

The closure, which will result in the loss of 200 jobs, appears to stem from the country's recent induction into the World Trade Organisation (WTO). Pre-WTO entry, crippling tariffs on imported electronics meant that it made sense for companies such as Sony to build a factory in Vietnam to meet rising demand from the market there. Now that those tariffs have disappeared, Sony can deliver to Vietnam televisions made outside the country and produced at an even lower cost than the ones leaving the factory in Ho Chi Minh City.

'FAKE' AIRLINE PILOT HELD IN SRI LANKA

COLOMBO - Sri Lankan police on Sunday detained a German man on suspicion that he used false documents to secure a job as a top pilot for Sri Lanka's national carrier, a spokesman said.

Ranjith Gunasekara said the man had been flying for the company for 10 months before an internal probe found he was only qualified as a co-pilot, and not as a captain of a wide-bodied airliner. "We are going to take over all the documents from personal files for our investigations," Gunasekara said. "The German national is now being held by the airport police."

Sri Lankan airline sources said the German national was discovered when a junior pilot, who had been sent for routine training on a bigger Airbus A-340, noticed that the "captain" was uncomfortable with the controls.

However, he had still captained Sri Lankan flights to European destinations including London, Frankfurt and Paris, as well as Dubai, the sources said.

Merchant of Death to stay in Thailand

The Criminal Court on Monday postponed a hearing to extradite a man to the United States, suspected of being one of the word's most wanted arms traffickers.

Viktor Bout's lawyer failed to appear in court, pushing back the hearing to September 22.

The Russian arms dealer, dubbed the "Merchant of Death", was arrested in Bangkok in a joint sting operation by US and Thai authorities in March. Bout is accused of running a multi-national arms smuggling operation which fuelled civil wars in the 1990s in countries like Liberia, Afghanistan and Colombia.

Monday, July 28, 2008

US aviation agency warned of oxygen tank danger months before Qantas emergency landing



By KRISTEN GELINEAU,
Associated Press Writer.

A directive shows the U.S. Federal Aviation Administration warned airlines to inspect oxygen cylinders on their planes months before the dramatic mid-air emergency last week aboard a Qantas flight that investigators suspect was caused by an exploding tank.

The air-worthiness directive, issued in April and effective in May, followed a report that certain oxygen cylinder supports in Boeing 747-400s may not have been properly heat-treated, which the FAA says could cause oxygen leakage and subsequent fire hazards.

Australian authorities say investigators are focusing on an oxygen bottle missing from the cargo hold of the Qantas 747-400 that was ripped open at 29,000 feet (8,800 meters) over the South China Sea on Friday.

EU updates blacklist: removes Mahan Airlines

26 JUL 2008
The European Commission adopted the eighth update of the so-called blacklist of airlines that are banned from flying into the countries of the European Union due to safety concerns.
With this update, the Commission removed the operating ban from an Iranian air carrier Mahan Airlines, in view of the significant efforts and progress accomplished by this carrier, which were verified during an on site inspection in Iran.

In view of the worrying results of International Civil Aviation Organisation (ICAO) audit reports on Gabon, the Commission decided that operators from this country should not operate into the EC. Nevertheless, the Commission acknowledges that the Government of Gabon has made prompt and drastic efforts to effectively change the safety situation of their civil aviation with the direct help from ICAO, including the adoption through an emergency procedure of a new Aviation Code. Two air carriers – Gabon Airlines and Afrijet – which are already flying into the Community are allowed to continue their services into the EC, without however a possibility to expand them under a strict regime of systematic and rigorous pre-flight inspections.

The Commission decided to maintain the ban on all operations of Ukraine Cargo Airways as the airline has not yet been able to successfully implement its corrective actions plan. Also, the Commission has reminded the authorities of Ukraine regarding the need to strengthen enforcement of the safety standards.

In the case of Indonesia, the Commission and the Air Safety Committee which is composed of all EU Member States heard three airlines at their request – Garuda, Mandala and Air Fast, along with the authorities for civil aviation of Indonesia. Following the unanimous opinion of the Air Safety Committee, the Commission decided that the Indonesian authorities have still not developed and implemented an efficient oversight programme on any of the carriers under their regulatory control. Besides, the corrective actions designed to address safety deficiencies detected by the ICAO and by the Commission, have not yet been assessed by ICAO.

The Commission also examined Cambodia and Philippines: in the case of Cambodia, the civil aviation authority of this country is expected to agree by September with ICAO a set of appropriate corrective actions to redress its situation. The Commission urges Cambodia to take all necessary measures to effectively address safety issues before the next update of the list. In the case of Philippines, the Commission acknowledges that the Government has taken already a series of measures and invites them to complete rapidly the resolution of the deficiencies of their safety oversight system to avoid being subject to restrictions by the EU.

Finally, the Commission examined the safety performance of the carrier Yemenia Airways, and decided that the carrier should complete its corrective actions plan by the next meeting of the Air Safety Committee. (EU)
EU press release

Asian carriers' wings clipped

Budget airlines are taking off across Asia, but their future is under a cloud from soaring crude prices.

The best Asian budget airline story I've heard was in 2006, while taking a short walk in Pakistan's Hindu Kush visiting the old princely state of Chitral, a Shangri-la where Osama bin Laden is said to be enjoying the alpine air and hospitality.

It seems that in 2004, a Pakistan International Airlines Fokker Friendship had overshot the runway on landing and, two years on, was still bogged in the wheatfields that surrounded the airfield.

Of course, few Chitrali had ever been inside a plane, airborne or otherwise, with ticket prices being what they - are or perhaps with PIA's ropey reputation, as evidenced right there in the bog.

So an enterprising local claimed the abandoned hulk, hired a local beauty to play stewardess and set up a travel agency by the plane's door, issuing entry tickets to the cab at 25 rupees, about 60c - or double that if "passengers" wanted an "in-flight" pakora.

The local nabob, Siraj ul-Mulk, who told me this tale, himself a retired PIA chief pilot, mused that the would-be aviation baron had probably turned more profit from the Fokker than PIA ever had, and without maintenance overheads. Such has been the rush into Asia's skies in recent years by the region's entrepreneurs that I'm betting my Chitrali hero parlayed his windfall into launching a real budget carrier. But such has also been the recent flight of oil prices that his and the other new carriers don't need Fokker Friendship, they sorely need, well, Fokker help.

Inspired by the success of Ryanair, easyJet and America's Southwest Airlines - and often with refugee executives from those airlines sitting on their boards - "low-cost carriers" have boomed from Japan to Iran.

The most successful of these, Malaysia's Air Asia, is as faithful a facsimile of Richard Branson's Virgin as are the bodgy Rolexes and DVDs of Asia's lawless bazaars. Indeed, Air Asia's youthful Eurasian chief executive, Tony Fernandes, seems to have closely followed Branson, right down to his airline's fire-engine red livery and uniforms, funky PR "attitude" and even a monolithic flag-carrying state carrier as primary competitor. Fernandes was even a record industry executive in a former life at - you guessed it - Virgin.

Also a self-promoter like Branson, Fernandes launched Air Asia just two months after the attacks of September 11, 2001, when few wanted to fly. Seven years and myriad 1 ringgit (32c) fare offers later, it's grown to be about three-quarters the size of state-owned Malaysia Airlines System and is much more fun to fly. Air Asia is expected to best Kuala Lumpur's lumbering MAS by 2010 in every industry measure; destinations served, profit and size of fleet. The best thing going for Air Asia is what it is not, a tool of government. Malaysian leaders liked to carry MAS in their diplomatic goodie bag, handing out routes willy-nilly for the photo opportunity when visiting fellow potentates in, say, Tunisia. MAS bosses were left with profitless schedules while Fernandes's fleet scoots off to places Malaysians actually want to visit.

Clark biggest winner in Thai-Philippine air accord

By Riza T. Olchondra
Philippine Daily Inquirer
First Posted 07:29:00 07/26/2008

MANILA, Philippines—More opportunities have just opened for airlines seeking to fly from the Diosdado Macapagal International Airport (DMIA) in the Clark Freeport, north of Manila, as an air agreement between the Philippines and Thailand was renewed, with Clark getting 8,600 passenger seats in capacity.

An equivalent number of passenger seats was allocated for Thai carriers going to Clark, bringing the Clark capacity to a total of 17,400 seats weekly.

Clark International Airport Authority (CIAC) president Victor Luciano told the Philippine Daily Inquirer that the agreement presents great opportunity for the gateway as it can accommodate 14 passenger flights daily.

Cargo capacity was also boosted for Clark, from zero to 700 metric tons weekly.

Luciano also confirmed that there was no limitation on airline designation. This means that even non-flag carriers can fly there from multiple designations.

Other Philippine carriers, aside from flag carrier Philippine Airlines, can apply to fly between Clark and Bangkok, he said.

The additional allocations were not limited to Clark. Manila airports got 5,400 seats, up from 2,930, with cargo allocation of 300 metric tons, up from more than 200 previously.

Airports outside Clark and Manila were given 2,110 seats, up from 850.

The Civil Aeronautics Board said that while Thailand was not currently contributing as much tourism as Hong Kong was, with only about 26,000 Thai tourists a year coming to the Philippines, the potential for growth was great.

Traffic is expected to grow further at a pace of seven percent or more per year since capacity has increased and more gateways have been added.

Traffic would also get a boost if Cebu Pacific Air opened a hub in Clark.

Cebu Pacific earlier said it needed five destinations to be able to do so: Hong Kong, Macau, Singapore, Taiwan and Thailand. With Thailand opening up to Clark, all five destinations are now reachable from the Northern Luzon gateway.

Candice Iyog,Cebu Pacific vice president for marketing and product, declined to comment on the impact of the Philippine-Thai air agreement on the airline’s plans for Clark, saying Cebu Pacific had not received an official advice on the matter.

She did confirm that having all five destinations accessible via Clark would give Cebu Pacific the freedom to revisit plans to open a hub there.

The Philippine air services negotiating panel is led by the Department of Transportation and Communications and includes the Department of Foreign Affairs, Civil Aeronautics Board, Department of Trade and Industry, Department of Tourism, and representatives of the airline industry. With editing by INQUIRER.net

Changi Airport in Singapore chalks up healthy growth in passengers



By Karamjit Kaur, Aviation Correspondent
ART STOP: This 7.5m-tall sculpture at T3, titled Coming Home, was created by the artist who designed the Beijing Games mascots. Changi Airport has been unrelentingly upgrading its facilities to attract travellers. -- ST PHOTO: JOYCE FANG
CHANGI Airport seems to be weathering the storm of a global aviation crisis, with half-year passenger traffic up 5.4 per cent to 18.7 million travellers.

The low-cost travel segment in particular has been key to the growth of the airport.

Between January and June, airlines like Tiger Airways and Jetstar Asia contributed about 11.5 per cent of Changi's total traffic, and close to half of the net growth.

But the airport, which accounts for 100,000 jobs and injects over $10 billion into the economy, faces new risks and challenges amid an uncertain economic climate and record high fuel prices.

Prime Minister Lee Hsien Loong warned yesterday that competition among airports is also becoming more intense.

Speaking at the official opening of Changi's Terminal 3 (T3) which started operating in January, he said: 'Many other airports aspire to be global and regional air hubs, and are building up their capabilities in order to attract more airlines and travellers.'

Last year, Changi handled 37 million passengers, making it the sixth busiest airport in the world for international traffic.

Its rivals are also growing.

In the first half of the year, passenger traffic at Bangkok's Suvarnabhumi Airport grew 1.94 per cent to 21.21 million passengers. Hong Kong grew 7.3 per cent to hit 24.4 million passengers.

Dubai airport - riding on the Middle Eastern boom - recorded a double-digit growth of 13.8 per cent, to handle 18.46 million passengers.

For Changi to continue to do well, it must among other things, 'pay meticulous attention' to service quality, Mr Lee said.

'Changi Airport is the first and last impression that most visitors have of Singapore. It is therefore a standard bearer for the Singapore brand. Indeed, for many transit passengers, Changi Airport is the only place in Singapore they come into contact with.

'Hence, it is essential that these passengers leave with memorable experiences, impressed with both the airport and with Singapore, and interested in coming back for a repeat visit.'

Corporatisation - announced last year - will be a major step for Changi to prepare for the future, said the Prime Minister.

When the transformation from government to corporate entity is completed by early next year, the airport will adopt private-sector practices like setting competitive salaries.

Apart from the restructuring exercise, Changi has also been unrelentingly upgrading and improving its facilities to attract airlines and travellers.

At 380,000 sq m, the new $1.75 billion T3 for example, is the airport's biggest. Currently five carriers, including Singapore Airlines, operate out of the facility.

Barely a year after its opening, planning has already started for T4, which will further increase Changi's handling capacity - now about 70 million passengers a year.

The chairman of the Civil Aviation Authority of Singapore, Mr Liew Mun Leong, is confident that Changi will close the year with 5 per cent to 6 per cent passenger growth.

He said: 'People will still need to fly. The question is how do we capture the traffic.'

One way is to support airlines and offer them incentives and in this regards, Changi is 'one of the more proactive' airports in the region, said Jet Airways' regional vice-president for South-east Asia, Mr Gerry Oh.

karam@sph.com.sg

Nok Air drops Bangkok-Phuket flights, sacks staff

NOK AIR is cutting its daily flights between Bangkok and Phuket from the end of July, along with services to three other destinations.

About 20 Nok Air staff at the airport on Phuket are also going to lose their jobs as the aviation industry crisis, fuelled by rising oil costs, impacts on Thai travel nationwide.

Inevitably, the cutbacks will affect tourism on Phuket and before long, investment on the island in property and resort construction.

The message coming from the real estate industry on Phuket is that the outlook has never been more promising. This is a surefire indication that sales are slow and now is the time to set your own price

Full report at www.phuketwan.com:
http://phuketwan.com/article/tourism/nok-a…ghts-sack-staff

Indonesian President not to visit Europe while flight ban continues

JAKARTA, July 26 (Xinhua) -- Indonesian President Susilo Bambang Yudhoyono has decided not to visit Europe until the European Union (EU) lifts a flight ban sanctioning against 51 Indonesian airlines, including Garuda airline, a minister was quoted by the Jakarta Post as saying here Saturday.

"The President will only visit European Union states on board Garuda Indonesia," Transportation Minister Jusman Syafii Djamal said Friday at the State Palace following EU's decision to prolong its ban against all Indonesian airlines.

President Susilo planned to visit Europe before the fuel prices hike in May. But the plan is still pending and has yet to be rescheduled.

Djusman said the President had ordered continuing efforts to improve flight safety and security.

Djusman also said that the reason for EU to continue ban for Garuda was non-technical despite EU's denial.

The minister also expressed disappointment by the EU's unfriendly approach of not trusting Indonesian civil aviation authority.





British businessman to testify against 'merchant of death'

By David Connett
Sunday, 27 July 2008

A British businessman, Andrew Smulian, is expected to give evidence against one of the world's most notorious arms dealers, Viktor Bout. Mr Bout, born in the former Soviet Union and known as the "merchant of death", is awaiting extradition proceedings from Thailand to the US, where he faces charges of aiding a terrorist organisation. Mr Smulian, Mr Bout's British-born long-term associate, is believed to have provided evidence for the prosecution.

Mr Bout is alleged to be one of the world's most wanted arms traffickers. He was reputed to be the model for the character of Yuri Orlov, the arms dealer portrayed by Nicolas Cage in the 2005 movie Lord of War. Mr Bout's list of alleged customers includes African dictators and warlords such as the former Liberian president Charles Taylor, Libyan leader Colonel Muammar Gaddafi and both sides of the civil war in Angola.

While Mr Bout has been accused of breaking UN arms embargoes – using his own airline to fly weapons all over the world – he has also provided services to Western governments, including Britain's Ministry of Defence.

Mr Smulian, 46, a military-trained pilot, was arrested in Bangkok with Mr Bout in a sting operation, in which US agents posed as Colombian rebels trying to buy millions of dollars worth of weapons.

Mr Smulian is believed to have a negotiated a plea bargain. Both men currently face charges that could result in 15 years in prison.

The US trial has the potential to embarrass a number of Western countries, including Britain. Critics claim Mr Bout's activities have continued unchecked because of the implicit involvement of Western intelligence agencies.

In March 2005, according to official Civil Aviation Authority records, Britain's Ministry of Defence hired Mr Bout's Trans Avia and Jet Line International to transport armoured vehicles and a small number of British troops from RAF Brize Norton and RAF Lyneham to Kosovo.

Hong Kong Express Airways has launched a new direct service to Seoul, Korea.

An initial four-flights-a-week summer service commenced on Friday.

Until 23 August, 2008, flights will depart every Monday, Tuesday, Friday and Saturday, leaving Hong Kong at 0230, arriving at Incheon International Airport at 0405. The return leg departs Seoul at 0805, arriving in Hong Kong at 1030. Doubly-weekly Hong Kong-Seoul flights will be available from August 24, 2008.

Earlier this year the airline also launched new routes to Japan; daily services to Shanghai and Beijing.

Raymond Ng, Director of Commerce at Hong Kong Express Airways said, “We are delighted to launch these scheduled flights between Hong Kong and Seoul. Korea has long been a favoured hot-spot for travellers from Hong Kong, and with the introduction of this service we are able to offer more options and flexibility for those travellers, with the guarantee of a quality in-flight experience. For our new Korea route, we have recruited over ten native Korean speaking flight attendants to ensure travellers enjoy a seamless in-flight experience.”

In the past few months, Hong Kong Express has rapidly expanded and strengthening its network in the Asian region, and will continue to do so in the near future with the launch of more new routes, including Manila, Philippines and Osaka, Tokyo in September.

Friday, July 25, 2008

Bigger Thai and Brazilian skies for fuel-hit Australian airlines

Amid fuel-hit airlines’ consecutive moves to slash their capacity, the Federal Government has settled aviation arrangements with Brazil and Thailand to expand opportunities in the international aviation market.
Federal infrastructure minister Anthony Albanese has announced a new deal with Brazil, which will more than double the weekly frequency of all-cargo flights from three to seven.
The Government has also secured an aviation deal with Thailand, removing the previous limit of seven air freight services per week. Airlines will also be able to take on or set down cargo when operating via a third country and use their own or leased planes.
The arrangements with both countries also allow more passenger seats with increased flexibility on aviation routes.
“The number of people travelling between Australia and the two countries is up significantly, with average annual growth in the Australia-Brazil market of around 15 per cent of the past five years,” Mr Albanese said.
He added the Australia-Thailand aviation market is Australia’s 6th largest, with 980,000 people travelling between the two countries in the twelve months to May this year, representing an increase of 20 per cent.
“Through deals like the one we have just negotiated with the Government of Thailand, the Federal Government is successfully liberalising the international aviation market while protecting the national interest - an approach that's reducing air fares for Australians and providing economic opportunities for the Australian aviation industry,” he said.
“The new, less restrictive bilateral agreement will support and sustain this growth into the coming years.”

ONE-TWO-GO GROUNDED FOR 1 MONTH, ACCUSED OF FALSIFYING DOCS

ONE-TWO-GO GROUNDED FOR 1 MONTH, ACCUSED OF FALSIFYING DOCS

Thailand‘s Department of Civil Aviation (DCA) intends to lay criminal charges following its investigation into the activities of Thai budget carrier One-Two-Go which it alleges falsified documents sent to the regulator.

The DCA deputy director, Wuthichai Singhamanee, says the department plans to lay criminal charges but he doesn't state specifically who will be charged, adding it may be the company and it may be management.

Wuthichai is also the chairman of the sub-committee investigating One-Two-Go Boeing MD-82 which crashed at Phuket airport in September that resulted in the death of 90 of the 123 on board.

The DCA on 20 July announced One-Two-Go would be grounded for 30 days with effect from 21 July. Wuthichai says the DCA has accused the airline of falsifying documents relating to pilot proficiency checks (PPC) and also that One-Two-Go breached pilot flight duty time limitations.

The DCA requires that every six months commercial pilots under-go a PPC "to ensure all pilots have proficiency and competency", involving ground school, going through safety procedures and doing some simulator training.

The DCA alleges it was able to determine the documents were false because they had the signature of the One-Two-Go official in charge of pilot checking and training, who it later transpired was actually away overseas on holiday when the documents were signed.

One-Two-Go operates a fleet of Boeing MD-80 aircraft and has no flight simulator of its own so it sends its pilots to either Japan Airlines in Japan or to Lion Air in Indonesia for simulator training, he says.

Commercial pilots have a strict operational timetable but the DCA alleges One-Two-Go breached these flight duty time limitations.

Even though Orient Thai Airlines is a sister carrier of One-Two-Go, the 30-day suspension, at this stage, only applies to One-Two-Go.


Seven of One-Two-Go's pilots have been barred from operating aircraft in Thailand because they allegedly knew about the falsification of documents.

When contacted on 21 July by ATI, One-Two-Go's spokeswoman declined to comment on the allegations made by the DCA but says the carrier will be issuing a statement in response to the DCA later today.

Thursday, July 24, 2008

Thai C 47 in Chiang Mai

C-47 212248 (c/n 12248) with Tango Squadron at Chiang Mai 31st August 2007

Thai tragedy families sue

Jul 24 2008 by Our Correspondent, Rhondda Leader

THE families of a young Welsh couple killed in a Thai air crash last year are suing the airline in a £125m compensation claim.

Tourist Bethan Jones, of Penmain Street, Porth, and boyfriend Alex Collins, from Maesteg, both 22, suffered massive burns when the jet caught fire on a dream trip around the world.

Alex died in the disaster which killed 89 people including eight Britons.

Bethan died 10 days later in hospital, with her parents at her bedside.

Now their parents are among other families taking action against One-Two-Go Airlines and associated companies in the action through the US courts.

Parents Richard and Margaret Collins and Steve and Jean Jones said: "We can confirm that we are among those who have instructed Stewarts Law to take legal action against One-Two-Go Airlines, Orient Thai and Grandmax Group.

"We believe the air crash was completely avoidable and those responsible should be held to account.

"While we accept that nothing can bring Alex and Bethan and the other people who lost their lives back, we are keen to make sure we prevent this from happening again."

James Healy-Pratt, partner and head of the aviation department at Stewarts Law in London, said: "This is about air safety, getting the truth about what happened and preventing it happening again.

"The families and victims of OG269 are taking legal action in the US Courts imminently.

"We will be forcing One-Two-Go Airlines to prove in court that they are not a low cost low safety airline."

Bethan and Alex, were on the One-Two-Go budget flight which crashed in torrential rain at Phuket airport in September last year.

She and Alex had met while studying English at Cardiff University.

After graduating last year the pair worked in call centres to save enough cash to travel around the world for six months.

They were just four days into their dream trip when the plane crashed.

Alex’s heartbroken parents Richard and Margaret said: "Alex was a fantastic, loving son and our loss has left us with a hole in our hearts that can never be filled.

"He was an intelligent, polite and considerate young man with an extraordinary sense of humour.

"He had a great zest for life and both he and his girlfriend Bethan were really looking forward to this trip that he had meticulously planned for over a year."

The full inquests into the deaths of all eight British victims of the crash will be held

after an investigation into the crash is carried out.

Both the pilot and co-pilot were killed in crash – and reports in Thailand suggested inquiries blamed pilot error for the crash.

Thai budget carrier halts flights on fuel

One-Two-Go Airline, Thailand's second-biggest budget carrier, will suspend operations for about two months after fuel prices almost doubled in a year and a crash in September killed 90 people.

The carrier will ground its planes from tomorrow until September 15, it said in an e-mailed statement yesterday.

The Orient Thai Airline unit will "reorganize'' its operation and staff before resuming flights, it said. One-Two-Go is at least the fourth airline in the Asia- Pacific region to suspend operations this year amid record jet- fuel prices.

Industry wide losses may total more than US$6.1 billion (HK$47.58 billion) this year, the worst since 2003, according to the International Air Transport Association. At least 25 airlines have already shut down worldwide this year.

BLOOMBERG

Thai authorities suspend service of budget airline for 30 days on poor safety standard

The Associated Press
Monday, July 21, 2008

BANGKOK, Thailand: The Thai budget airliner One-Two-Go, which suffered a deadly crash last year, will be forced to suspend the bulk of its operations starting Tuesday, the Thailand's Civil Aviation Department said.

Chaisak Angkasuwan, director of Thailand's Civil Aviation Department, said Monday that eight out of twelve planes operated by One-Two-Go Airlines will be suspended for 30 days.

"We found that their system to ensure aviation safety is not up to standard," Chaisak said in a telephone interview. "Their pilot screening is also not systematic and not up to standard."

The eight planes suspended are all MD-82, he said, adding that the airline's remaining four jets would not be grounded.

Airlines officials could not be reached for comment.

The partial suspension coincides with the company's decision Friday to cease operations temporarily starting Tuesday for financial restructuring. It cited the rising cost of oil, increased competition and a drop in domestic traffic for its suspension.

The airline has struggled to recover from a crash in September on the tourist island of Phuket that killed 89 people. The plane skidded off a runway while landing in strong wind and rain and then it caught fire. Pilot error was the cause of the accident, Chaisak told The Bangkok Post on Monday.

The dead came from at least 10 countries, including the United States, Australia, Britain, France, Germany, Iran, Ireland, Israel, Sweden and Thailand. Official tallies confirm that Thailand had the most victims — 36 — followed by Iran with 18.

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.

Thai Transport Ministry warns air carriers of safety rules

The Ministry of Transport has warned it takes aviation safety seriously and any airline found to have recruited pilots with record of falsifying safety documents will be grounded. Transport Minister Santi Prompat was responding to reports that a low-cost air carrier was found to have doctored safety standard test document.

The Civil Aviation Department suspended the service license for carrier One-Two-Go for 30 days after discovering several breaches of aviation safety regulations, including allegations that one of its pilots had tampered with safety test documents.

One-Two-Go President Udom Tantiprasongchai said the company was notified of the problems over a week ago. He said the suspension of the airline's operating license took place after the company had already announced it would cease services for 45 days due to a number of reasons, including the expensive price of fuel.

Mr Udom said the carrier intends to use this period to rectify problems including compliance with safety regulations that will return service to safety standards once it resumes.

The One-Two-Go president said the company is investigating the Civil Aviation Department's claim that one of its pilots submitted a fraudulent safety test document and if found guilty, the pilot would face the maximum penalty. (TNA)

More families sue One-Two-Go

PHUKET AIR CRASH
BOONSONG KOSITCHOTETHANA
The wave of litigation against One-Two-Go Airlines is gathering force as more families of the victims killed in the Sept 16, 2007 Phuket air crash are coming forward to join others in pursuing legal action in US courts. The families of a Welsh couple killed in the crash are the latest to make public their plan to sue the Thai airline, its parent carrier Orient Thai Airlines and the GrandMax Group, a related lessor, as part of a 125 million (8.17 billion baht) compensation claim.

Alex Collins and Bethan Jones, both 22, died when One-Two-Go's MD-82 jetliner crashed in strong winds and heavy rain at Phuket International Airport, leaving 89 dead and 41 injured.

The victims' parents have told the British media: ''We believe the air crash was completely avoidable and those responsible should be held to account.

''While we accept that nothing can bring Alex and Bethan and the other people who lost their lives back, we are keen to make sure we prevent this from happening again.''

The legal action comes as the sister of an American victim, Stefan Woronoff, has uncovered the chilling details of the transcript from the flight recorder on board flight OG269.

The document, uncovered by Bonnie Rind, who is calling for an inquiry by the US National Transportation Safety Board, reveals that neither the Indonesian pilot Arief Mulyadi or his co-pilot, who were both killed, were in control of the plane when it came in to land.

Ms Rind claimed that for 15 critical seconds before the crash, nobody was flying the plane.

Ribbeck Law Chartered, the Chicago-based law firm specialising in aviation disasters worldwide, is already representing more than seventy families, claiming damages of up to US$400 million in the US from the airline and the other liable parties.

They are also asking Thai authorities to file criminal charges against Udom Tantiprasongchai, chief executive and founder of the two carriers.

The Thai Department of Civil Aviation has ordered the One-Two-Go planes grounded for 56 days from today and given Orient Thai Airlines 30 days to improve its safety standards.

Mr Udom and the other airline executives could not be reached for comment yesterday.

More flights to Thailand under new agreement

July 23, 2008 Air services to and from Thailand and Brazil will increase after the federal government agreed to new aviation arrangements.

Passenger services to Thailand - Australia's sixth-largest destination - will increase immediately from 35 to a possible 40 a week, and to 45 from March 2009.

There will also be unlimited freight services to Thailand, previously restricted to seven flights a week.

From March next year, the maximum number of seats on flights between Australia and Thailand will reach more 1.87 million annually, 28.6 per cent more than were available under the old bilateral aviation arrangements, Transport Minister Anthony Albanese said.

Airlines in Brazil and Australia will have their entitlements doubled to 14 weekly passenger flights and seven freight services.

Brazil was the most popular South American destination for Australian travellers, with more than 60,000 people flying between the two countries last year.

"The removal of most restrictions on air routes between Australia and Brazil will, over time, provide more choice for travellers ... and allow our airlines to take advantage of the rapidly growing economies of South America," Mr Albanese said in a statement.

AAP

This story was found at: http://www.smh.com.au/articles/2008/07/23/1216492500610.html

Thai government suspends One-Two-Go's license to boost foreign tourist confidence

BANGKOK, July 22 (TNA) – The Thai government Aviation Department's move suspending the operating license of One-Two-Go Airlines, a major Thai budget carrier, for 30 days beginning Tuesday will help boost confidence among foreign tourists, according to department director-general Chaisak Angkasuwan.

The department on Monday issued the order after it found the company had violated a number of aviation rules ranging from submitting false documents to the government to the lack of quality controls.

Speaking on TV9's "Modernnine Morning News" programme, Mr. Chaisak said the department had already informed the airline's management of the order issued upon finding various faults regarding aviation safety.

He said the department was not aware that the order was issued concurrently with an announcement by the company of a 45-day halt to flight services due to higher fuel costs.

Mr. Chaisak said he believed the airline's operating license suspension would help boost confidence among foreign tourists to use local airline services.

Unless the department was serious on the matter, it would affect the country's airline services.

He reaffirmed that budget airlines operating in Thailand had a principle to reduce business expenses, not the safety standard, for commercial viability. So, all low-cost airlines must adopt the same aviation standard.

Should One-Two-Go Airlines be unable to solve its problems within 30 days, he said, the service suspension might be extended or the license be revoked. (TNA)