Fuel price spike, lower Chinese traffic put Nok Air in red
11 December 2018 | Nok Air
Bangkok, November 14, 2018 - Nok Air posted a loss in the third quarter of this year due largely to fuel price hike and depressed revenues caused by slowdown in Chinese traffic.
The SET-listed low-cost carrier lost 974 million baht in July-September compared to 689 million baht in the same period last year.
Revenue dropped by 12% in the quarter to 2.86 billion baht as the result of the 40% jump in fuel prices, fierece fare competition and low-season travel effects, according to Nok Airlines acting chief executive Pravej Ongartsittigul.
"We should have been able to announce better financial result for the quarter if those uncontrollable negative impacts, which were common among most Thai airlines, did not emerge," he pointed out.
Nok Airlines' fuel bills soared 29.03% to 1.13 billion baht as the average jet price in the quarter rose to US$88.90 per barrel versus $63.56 a year ago.
However, the airline was able to cut expense by 3% to 3.84 billion baht with costs related aircraft maintenance reduced.
The decline in Chinese tourists and intense market contest affected passenger revenue by 13% while service income grew by 8%.
But it managed to raise the cabin factor by 2.55 percentage points to record 87% in the quarter.
Mr. Pravej noted that Nok Airlines' plan to turn its balance sheet around, mainly by cost reduction and revenue improvement, is in progress.
In the October 2018 rating, OAG.com, the global flight data provider, put Nok Airlines as one of the top-ten airlines in Asian region for good on-time performance with a 85.3% scores.
Skytrax, the UK-based aviation consultancy which runs an airline and airport reviews, also crowned Nok Airlines as Thailand's #1 low-cost carrier as part of its 2018 World Airline Awards.
Nok Airlines's network covers 24 destinations in Thailand and 12 in this region.