Nok Air Add Udon-Loei Route

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BOONSONG KOSITCHOTETHANA (Bangkok Post)

The fledgling budget carrier Nok Air is gearing up to significantly expand its fleet and network to ensure future growth.

After putting its fourth 149-seat Boeing 737-400 jet and a 66-seat ATR-72 propeller plane into service earlier this year, Nok Air plans to add two more jets with capacity of 150-160 seats each in the fourth quarter.

Next year, it plans to add one jetliner in every quarter.

The airline, partly owned by Thai Airways International, will open its first overseas route _ from Bangkok to Bangalore, the Silicon Valley of India _ in October.

It is contemplating a second destination in India next year and a Bangkok-Macau service in the third quarter of next year.

"It's time for us to grow our operation," said Sehapan Chumsai, executive vice-president for marketing of Nok Airlines.

The airline reported a satisfactory performance with a net profit of 50 million baht in its first full year of operation in 2005, and has done "quite okay" in reaching a break-even point, said Mr Sehapan.

Nok claimed a high seat occupancy level, known in the trade as "cabin factor", of 83% last year and was running at 86% in the first quarter of this year, Mr Sehapan said in an interview.

He attributed the good performance to business from first-time flyers and repeat passengers who had been attracted by the low fares offered.

Critics maintain that Nok is able to charge low fares because it leases its planes at bargain rates from THAI, which also charges less for aircraft maintenance and services. Executives of Nok Air and THAI have denied the claim.

Nok Air is currently negotiating to obtain two single-aisle twin-jet aircraft, either used Boeing 737-400s or new Airbus 320s, depending on availability, from aircraft leasing companies to put into service as soon as October this year.

Mr Sehapan denied reports that Nok Air planned to fly to Malaysia and Indonesia, or that it would take over two short domestic routes _ Bangkok-Phitsanulok and Bangkok-Khon Kaen _ from THAI.

"These are not in our business plan," he said, noting that THAI wanted to find a new operator on the two domestic feeder routes to avoid losses.

THAI has been gradually phasing out loss-ridden domestic services including Bangkok-Nakhon Si Thammarat, Bangkok-Trang and Chiang Mai-Mae Hong Son. It wants to focus on more lucrative international business.

Early this month, Nok Air introduced two new domestic routes _ Bangkok-Loei and Udon Thani-Loei _ using an ATR propeller plane leased from THAI. Nok Air today operates 10 domestic routes.

On the new Bangalore route, Nok Air has agreed in principle on a strategic operational alliance with the Indian low-cost carrier Air Deccan to feed passengers to one another.

It is delaying its flights to Macau beyond this year as planned earlier, in order to finalise airport service charges with Macau authorities, and because it still needs additional aircraft capacity.