Thursday, May 28, 2009

Thailand's PB Air aims to grow as it flies back to profit

ATR turboprops help revive balance sheet

Published: 27/05/2009 at 12:00 AM
Newspaper section: Business

PB Air, the airline run by Singha beer baron Piya Bhirom-Bhakdi, has begun to see a return to profitability as its business plan bears fruit.

"We are slowly coming out of the mud of red numbers," Heribert Gaksch, director for marketing and business development at PB Air, declared yesterday.

The carrier, now 19 years old, saw a turnaround on its balance sheet following a fleet change, cost controls, and a marketing and distribution beef-up in February of this year.

The driving force to profitability is the substitution of its two Brazilian-made Embraer ERJ 145 LR jets with two ATR 72-500 turboprops leased from Bangkok Airways, the kingdom's second-largest carrier.

The turboprops have provided better economic yields than the Embraers, which PB Air returned to the American aircraft lessor Gecas on April 18 after seven years in the airline's service.

The addition of the turboprop, which can seat 70 passengers instead the Embraer's 50, as well as a stepped-up marketing effort including longer operating hours for its call centre and the creation of sales counters at Krungthai Card branches enabled PB Air to sell more seats.

PB currently fills an average of 80% its seats.

The airline operates 10 flights a day on six secondary domestic routes from Bangkok to Lampang, Nan, Nakhon Phanom, Sakhon Nakhon, Buri Ram and Roi-Et _ all unique routes.

PB Air is due to launch regular service to Mae Sot on June 5 with three flights a week, and it hopes to begin operating flights to Chumphon in the next few months, said Mr Gaksch.

The improved financial results have seemed to encourage Mr Piya to keep the carrier flying.

PB Air is assessing its options for a future fleet after the initial "dry" lease of ATR 72-500s, covering aircraft but not crew, expires in October this year.

It has been in talks with aircraft lessors for long-term leases of two ATR 72-500s or it may extend the agreement for the two planes with Bangkok Airways.

Bangkok Airways has a fleet of nine turboprops, excessive in light of the slowdown in demand caused by the economic crisis and political turmoil.

Mr Gaksch said PB Air needs to have three such turboprops to support its route expansion or if it wants to offer charters.

Meanwhile, the airline is upbeat about the potential of the Mae Sot service with a likely 40-50 leisure and business travellers on each flight.

An introductory one-way fare of 2,600 baht, 300 baht lower than the normal listed rate, has been offered for the first month of operation.

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