Nok Air Drops Bangkok-phuket Flights, Sacks Staff

[alanmorison]

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

Edited July 25, 2008 by george
Added link to source

[THAILIBAN]

HUUUUUH ?

if they cut Phuket PLUS 3 other destinations, then whats left ???

if this is true, this would be the next budget-carrier ceasing operations......

NOT GOOD for Thailand, NOT GOOD for the Passengers...... competition is needed.... otherwise prices will increase even more....

[wrecker]

Well actually they ceased operations weeks ago already to 2 of these destinations. The problem with these companies is of course that they are non serious. An airline created out of Thai airways to compete with the same company is ludicrous especially when you see that TG is offering great value for money especially with the promotional fairs. So instead of one full airplane you have two half filled airliners. I suppose that the fact that Bangkok has two airports must frive airlines and heir customers crazy too, but than again our military need to make some money too (Don Muang).

[shawndoc]

HUUUUUH ?

if they cut Phuket PLUS 3 other destinations, then whats left ???

Apparently the BKK to Nakhon Si Thammarat routes are doing good.

[gbswales]

The problem surely is that Thai Airways cream off the customers who can afford the extra to fly in their (I assume) half empty planes - with One Two Go virtually out the playing field it is hardly surprising that Thai cut their low cost airlines service. Nok Air was never really in competition with Thai Airways - how could they be.

It is high time the world recogniseed that "comfort flying" is a relic of the past - the aim must be to fly fewer aircraft with larger passenger payloads which should also give lower prices. The worlds prestige airlines are all struggling to survive but that begs the question whether their survival is desirable at all.

Huge fuel taxes have been placed on passengers which have little effect towards making air travel greener or more efficient - a fairer way would be tax airlines on the number of "empty" flight seats in any given flight. This would encourage them to consolidate unecessary flights and fill the aircraft - this in turn would recuce pollution and make air travel cheaper. The tax should be based on the number of passengers that could be carried - so each first class passenger might equate 4 "empty seats"

[agudbuk]

So now it's Thai Air or a long bus trip

[Keithangel]

or in my case to Chiang Rai the train or Chaing Mai and a short bus trip

[harleyclarkey]

Bloody heck....Looks like I may have to join the ladies of the night on the busses!!! Well maybe that's not such a bad idea....bus full of distractions and lots of time on my hands!!....Mmmm interesting that.

[sammo]

So now it's Thai Air or a long bus trip

Depends where you are going................if it's Phuket then there are still seven flights daily with Air Asia between there and the capital.

[Merangue]

Ummm AirAsia is still in the running for the time being

[sammo]

Ummm AirAsia is still in the running for the time being

True......but i think Air Asia are a more serious player than Nok or 1-2-Gone. When fuel prices started rising, Air Asia looked at ways to offset this without putting the basic cost of the flight up. Sure, they increased the fuel surcharge along with all other airlines, but they also introduced 'extras' such as paying more to board first, insurance (provided by AIG but with a share going to Air Asia) and baggage charge. It all adds up and goes some way to off-setting the huge increase in fuel costs. Air Asia will still be around after the others have fallen because it is run by smart people.

[BEENTHEREDONETHAT]

So now it's Thai Air or a long bus trip

agudbuk

Great avatar!

[DrDave]

Ummm AirAsia is still in the running for the time being

True......but i think Air Asia are a more serious player than Nok or 1-2-Gone. When fuel prices started rising, Air Asia looked at ways to offset this without putting the basic cost of the flight up. Sure, they increased the fuel surcharge along with all other airlines, but they also introduced 'extras' such as paying more to board first, insurance (provided by AIG but with a share going to Air Asia) and baggage charge. It all adds up and goes some way to off-setting the huge increase in fuel costs. Air Asia will still be around after the others have fallen because it is run by smart people.

Agreed.

I noticed that Thai AirAsia is still offering their full schedule of flights for the BKK <-> HKT route. The fuel surcharge for a flight booked for the end of September is 600baht, and they're continuing to offer promotional base fares in the 99-499baht range. With the other "low cost" carriers out of the market, I'm surprised they're still offering these deep discounts. This got me to wondering about the real impact of fuel costs, given the fuel surcharges that have been implemented by all carriers. The only conclusion that I can draw is that those airlines that were efficient and profitable before the fuel crisis will probably remain so, while those that were not will probably shake out.

Here are a few rough calculations to help understand the impact of rising jet fuel costs, using Thai AirAsia and the BKK <-> HKT route as an example.

Jet Fuel cost this month is approximately $168USD/barrel = 5,700baht/117litres = 49baht/litre (not accounting for an airline locking in lower priced futures)

The average burn rate for a Boeing 737 is about 3,200 litres/hour while in flight. (Seems a little low, but it was the only number I could find).

Actual flight time for the BKK -> HKT route is approximately 1 hour, which requires about 3,200 litres of fuel, plus maybe another 300 for taxi/ramp time, so let's call it 3,500 litres. This gives a total fuel price of about 172,000baht for the flight.

Thai AirAsia's Fuel Surcharge is 600baht/passenger. Assuming a load factor of 90% (not unreasonable now, given the lack of competition) this would amount to about 72,000baht in fuel surcharges for the flight. (Assuming 119 passengers).

The current fuel surcharge paid by each customer shields the airline from a fuel price increase of about 72% from the point in time from which fuel prices were more stable and there were no fuel surcharges (a few years back, I think). I don't have any information regarding how much the price of jet fuel has increased over the past few years in Thailand, but I would guess that its more than 72%, meaning the additional increase has to be either absorbed by the airline, or defrayed through additional revenue (such as checked bag fees, etc). Those airlines that were only marginally, or perhaps not profitable at all before the price of fuel skyrocketed just won't be able to compete with other more efficient airlines.

[frankpelagic]

I had already stopped flying Nok Air. Having flown about 30 times a year for the past 20 years, and being in possession of a commercial pilots licence, I can honestly tell you that the scariest flight I have ever had was Nok Air BKK - HKT, last year. The driver had the plane set up totally wrong for the approach, way too high, way too fast. You can usually tell the quality of the landing by listening to the rise and fall of the engine noise. A nice constant noise tell you the pilot has set up the trim, approach speed and rate of descent properly, and only needs minor corrections. This clown must have thought he was in a fighter. People were screaming and praying, and I really thought we were going to end up in the bush between the beach and the runway.

We didn't, hence my ability to recall this story.

As regards losing money, the typical Thai response to falling profits, is to double the price. That will give the same profit, won't it?

Red wine 150 baht for cheap Italian in the Margarrita bar, Tuk Tuk prices are silly. Bar fines and hire of "company" through the roof.

No, its Pattaya for me now.

[phetpeter]

one first class ticket is rough the value of 20seats, business class roughy 12 seats. on old VLM route LCY -ANR 2 business class tickets flight paid for, consider 5 business and 45 ecomony, a good profit,, no wonder Air france /KLM bought the company.

On long haul it the same type of maths, Thats why airlines, can offer 99b tickets, thats why there are different classes and ticket codes its a maths system, to HK 2 busines, 5 E class to d class then 100 99b tickets available. Thank god, a maths expert and computer work it out, but it goes along those lines.

Its not really that expensive to fly a plane in real terms.

[tdo]

There must be reason for some airlines to continue to earn profit when others are flailing... Great case study, Southwest Airlines, 60+ quarters of profit, and the same airline that Air Asia, Tiger Airways are copying their efficient business model.

another observation, Air Asia & tiger Airways all fly brand new or relatively new planes, Airbus 319 and 320s. Fuel efficiency for these new engines are probably 10 times better than what Nok, 1-2 go and the rest of the failing US airlines, whose were flying 15-20 years old Boeing 737 or Airbus planes.

[iang]

Before the opening of Suvarnabhumi, I was a regular client of Nok Air and flew with them quite frequently. When Suvarnabhumi opened & Nok Air moved back to old (and dismal) Don Muang, as many of my flights were with international connections, flying Nok Air was no longer convenient & no longer and option.

I wonder just how much business Nok Air has lost, as a result of their bad (in my opinion) decision to move back to Don Muang!? I can't be the only one & being no longer to connect with international flights must have lost them a vast amount of business. This meant that I for one, went back to using TG, regardless of the fact it was more expensive.

When I first started using Nok Air & always flying their Nok Plus (for the bigger seats & higher baggage allowance), there was a significant price difference between Nok Air's Nok Plus and business class on TG.

However Nok Air's fues surcharges & fees are now substantially higher than those of TG. As an example, just this week, I went to book myself on a Chiang Mai - Bangkok flight for next week & this time it didn't matter if I went into Don Muang. Once all the fees, charges & fuel surcharges were added, the Nok Air flight in Nok PLus was just Baht 800 cheaper than proper business class with TG, which also comes with the benefits of flying in a bigger plane, priority check in, use of their business class lounge etc. So with just an 800 Baht price difference, I'm flying with TG thank you!

Nok Air, being now in a desperate situation, have added on so many extra fees & charges & fuel surcharges, they're no longer a low cost carrier, so are now in a market void, that's bound to end in closure or considerable lost money to the owners to prop it up!

[barryofthailand]

As the price of oil continues to be expensive, so goes the airline industries. I'm afraid to say that the days of cheap flights has come to an end. Within the next year the airline industry will have to make major changes. There will be mergers and Bankruptcy's, and airplane flights will become more expensive. There will also be layoffs. What will happen to the world economy? Only time will tell. Start saving your money now.

Barry

[Adagio]

This could be the way of the future. All of us Europeans who live out here and travel home once a year for our non immigrant O visas will probably get a shock at the price rises next time we book and if oil prices don't drop back to well below $80 we'll all be scr*w*d! Imagine that long bus ride!

[hansnl]

As the price of oil continues to be expensive, so goes the airline industries. I'm afraid to say that the days of cheap flights has come to an end. Within the next year the airline industry will have to make major changes. There will be mergers and Bankruptcy's, and airplane flights will become more expensive. There will also be layoffs. What will happen to the world economy? Only time will tell. Start saving your money now.

Barry

I agree with you, however, like most "subsidised" industries nearly all airlines are still thinking that the don't need to change, but they do, and very bloody fast.

For starters, jets use an awful lot of kero.

Even making leaner burning engines will not help very much more, because the maximum efficiency of a jet engine is VERY low.

The jet engine has been designed for military use, and will never be cheap to run.

The turbo prop engine, on the other hand has been designed for cheaper burning, more efficiency!

See for example the Airbus 400 Military transport, turbo prop engine and a revolutionary propellor.

Speeds up to 720 km/h, 20% more efficient as jet engines.

Guess, that will be the way to go, back to props!

I wonder, maybe Airbus or Boeing are already considering long distance people carriers driven by props?

Maybe, who knows.

Or maybe, because there was no demand from the short sighted airline managers for the time after the cheap fuel, nobody did nothing.

[Journalist]

Some good posts above ^ Nice ones. (esp the one doing the math)

Now more than ever, tourists should make an effort to go to Phuket to support the hotel business and its employees there.

Don't think new build residential will be affected, as the kind of people who buy Thb 30 m villas aren't bothered by fuel surcharges or discount carriers cutting routes.

[stevenl]

If you look at the full article, I find it very bad journalism the way fact and opinion are intertwined.

[jbhh]

...

Actual flight time for the BKK -> HKT route is approximately 1 hour, which requires about 3,200 litres of fuel, plus maybe another 300 for taxi/ramp time, so let's call it 3,500 litres. This gives a total fuel price of about 172,000baht for the flight.

Thai AirAsia's Fuel Surcharge is 600baht/passenger. Assuming a load factor of 90% (not unreasonable now, given the lack of competition) this would amount to about 72,000baht in fuel surcharges for the flight. (Assuming 119 passengers).

...

Thank you very much for the research and information!

It just makes me wonder now, how they can operated at these prices?!

Let's assume, they really have always 90% load factor, or 119 passenger, which is then 72,000 Baht fuel surcharge, that means they are still missing 100,000 baht!!

With 119 Passengers that's roughly 900 Baht per passenger ticket fee that they have to use just for paying for the fuel! How do they make profit out of this, specially when they are giving x amount of seats away for 99-499 baht?!

It just makes no sense to me...

another note: I like the idea of props... never liked jet engines anyways.

and another: Interesting facts about the prices of nok plus and TG... makes me wonder how long they will continue operations like this.

[alanmorison]

If you look at the full article, I find it very bad journalism the way fact and opinion are intertwined.

Fact and opinion have always been intertwined in both good and bad journalism. It's just that we try to make it obvious, and to provide a complete context. In a world full of blogs and forum sites like this one, the character of news is changing as fast as the process of dissemination. Readers still get to decide what to believe. But these days, they demand a more complete picture, instantly. Few have the time to read the news item then the Opinion piece. One of the reasons online coverage is destroying newspapers is because readers' expectations have changed. Sorry, no apology for our 'new journalism.'

[VBF]

HUUUUUH ?

if they cut Phuket PLUS 3 other destinations, then whats left ???

Apparently the BKK to Nakhon Si Thammarat routes are doing good.

I beleive Bangkok Air is still going - they have (had?) flights from DM to Phuket and Utapao to Phuket, some going direct and some via Samui. Flown them many times - no complaints.

[Boater]

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

so that leaves only 2 carriers to Phuket, what happens if airasia goes!, we are screwed

[stevenl]

Sorry, no apology for our 'new journalism.'

Your choice. I just find the sentence: "inevitably, the cutbacks will affect tourism on Phuket and before long, investment on the island in property and resort construction." directly after the first part of news information purely opinion, and it should IMO not be there. (I also don't agree with the statement, but that is a different matter).

In the rest of the article you missed Bangkok Air BTW as one of the carriers still flying to Phuket from Bangkok.

[kaphi]

Fact and opinion have always been intertwined in both good and bad journalism.

Mixing opinion and fact harms transparency. And transparency is a must for good journalism.

Sorry, no apology for our 'new journalism.'

No need to apologize. ThaiVisa provides prompt on-topic notifications. I suspect that neither accuracy nor quality is something people expect from forum news.

[MaiChai]

Air Asia/Tiger Airways flying new planes: its a bit like a new car: when was the last time you need to put spare parts in a new car? New planes means low maintenance, which means less time on the ground fitting out and more time in the air earning revenue...

Edited July 27, 2008 by MaiChai

[britmaveric]

Nice knowing you Nok Air.

As for Air Asia - international carrier with lot more going for it than Nok or 12Go.