Phuket Air expects losses of 500 million baht in revenue
this year on top of the 300 million baht lost last year that will force the
airline to make 300 employees redundant.
Fuel costs and rapid expansion at the wrong time were
blamed as major causes, while Phuket Air executive vice-president Capt
Chawanit Chiamcharoenvut is seeking help from Thailand’s Department of
Civil Aviation to clear up accusations made by France’s aviation authority
that the airline is unsafe.
Usually aircraft safety is handled by the country where
the aircraft is registered and the airline is challenging the break with
that precedent claiming it could be politically motivated.
Surging fuel costs were the main burden rising to the
point where the airline claims it represents 30 percent to 40 percent of
operational costs. Meanwhile, the airline is still saddled with high fixed
costs such as aircraft lease, office rental and staff salaries.
The first cost cutting measure involves making 300
employees redundant a task that has taken three months to clear. The airline
closed offices in Phuket, Hat Yai and Krabi, while reducing office space at
Bangkok International Airport. It focused on direct sales through the
Internet, but that move has failed to deliver more passengers.
In addition, the airline recently increased its fuel
surcharge to 610 baht per roundtrip on domestic routes and 1,040 baht on
international routes to cover increases.
“As a result, we reduced our operational costs to 20
million baht per month,” said Capt Chawanit. He admitted that rapid
expansion to the UK and Netherlands since last year and the tsunami that hit
the country’s tourism ended all hope of breaking even and has resulted in
even heavier losses than those reported in 2004.
Meanwhile, reacting on the accusation from the French
aviation authorities, Phuket Air delivered a letter to the Department of
Civil Aviation asking the authority to help seek clarification on the
announcement that identifies six international carriers that cannot fly to
France. Phuket Air was the only airline from Asia on the list.
Capt Chawanit said the airline has obtained a safety
certification from the Thai DCA and has been operating without any technical
problems since last April after it resolved safety issues with the UK and
Netherlands. Now the French aviation authorities have suspended the airline,
a move Capt. Chawanit claims is unfair.
The airline is currently operating three domestic routes,
from Bangkok to Buri Ram, Mae Sod and Ranong plus one regional route from
Bangkok to Yangon.
Capt Chawanit said the airline plans during this high
season to increase its flights to Mae Sod from five services weekly to
seven, and to Ranong from seven to nine weekly. Phuket Air is also
considering three weekly flights from Chiang Mai to Udon Thani in October.
Meanwhile, on the Bangkok-Yangon route, the airline will increase its two
weekly services to four.