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Thai AirAsia Expands Operations With New Routes


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Thai AirAsia plans broader operations

BANGKOK: -- While other airlines are downsizing in line with a slowdown in travel demand triggered by global economic meltdown, budget carrier Thai AirAsia is to expand its operations this year.

The airline, part of AirAsia, Southeast Asia's largest low-cost carrier group, targets carrying about 1 million more passengers this year, adding four new jets and introducing up to six new routes in India and China, while maintaining existing frequencies and routes.

Thai AirAsia is optimistic that it can turn its balance sheet around with "good profit" this year. This would be a major recovery from 2008, when it was hit by a "significant" loss in fuel hedging and the Bangkok airport closure crisis.

"There should be a smile on our face in 2009," Tassapon Bijleveld, chief executive of Thai AirAsia said yesterday, referring to profitability.

He declined to confirm whether the airline would report a loss last year, although he indicated that its balance sheets had been significantly impacted by negative factors.

Thai AirAsia reportedly betted heavily on short- and long-term hedging contracts last year when oil prices shot through the roof before collapsing around the end of the year.

The airline stopped new hedging arrangements towards the end of last year though it is still burdened with previous contracts.

Mr Tassapon said the airline's financial outlook for 2009 looks positive, thanks partly to the faster-than-expected recovery of passenger traffic demand resulting from improvement in the country's political situation and international image.

The carrier filled 76-78% of its seats in January and projects an average load factor of 85% for all 2009.

The airline last month took delivery of the first of four new A320 jetliners from the European planemaker Airbus, raising its current fleet to 15 aircraft.

The remaining three planes are scheduled to join Thai AirAsia's operations later this year.

Mr Tassapon said the airline has no plans to delay taking delivery of the A320s ordered from Airbus, though the delivery of the first was slightly behind the original schedule.

With additional aircraft, Thai AirAsia will raise its capacity by about 30%.

The carrier targets carrying 5.1 million passengers this year, up from 4.2 million recorded last year.

The new jetliners will be essentially used to operate Thai AirAsia's planned new routes, two or three will each be assigned to India and China.

The Thai AirAsia chief declined to name the planned cities but said they are within a radius of 3-4 flight hours from Bangkok.

"Retreating does not reduce problems. We believe that expansion and market stimulation are key to enabling us to survive the economic meltdown and grow," he added.

Last month, the airline added two daily international routes: Bangkok-Bali and Bangkok-Guangzhou.

-- Bangkok Post 2009-02-17

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