Thai budget carriers' losses mount, shares tumble

Thai budget carriers' losses mount, shares tumble

 

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FILE PHOTO: A Nok Air aircraft, painted like a duck, prepares to take off at Don Mueang International Airport in Bangkok, Thailand, June 29, 2016. Picture taken June 29, 2016. PREUTERS/Chaiwat Subprasom/File Photo

 

BANGKOK (Reuters) - Thailand's low-cost carriers saw share prices falling nearly 7 percent in morning trade in Bangkok on Friday after they reported losses due to tough competition and higher fuel costs.

 

Asia Aviation Pcl , AirAsia Group Bhd's partner in Thai AirAsia, reported a loss of 306 million baht ($9.21 million) for its April-June period versus a profit of 170 million baht a year ago, sending its shares down over 4 percent.

 

Losses at rival Nok Air Pcl widened to 830 million baht in the quarter versus losses of 650 million baht a year ago. Nok's share prices were trading 7 percent lower.

 

Despite Thailand's tourism boom, its airlines have struggled due to higher jet fuel prices, a drop in passengers from off-peak travelling and stiff competition.

 

The country expects tourist arrivals to reach 37.5 million this year, up 6 percent from 2017.

 

Nok Air, the budget arm national carrier Thai Airways International Pcl , saw revenue dropping 1 percent to 3.35 billion baht.

 

Thai AirAsia is planning to add more routes between India and Southeast Asia in the next quarter to minimise the risk of depending on a major customer base in the region, the airline said.

 

"Higher fuel costs have been a challenge with fuel being a major operating cost for any airlines," Thai AirAsia Chief Executive Santisuk Klongchaiya said in a statement.

 

Analysts say tourist seasonality next quarter should help recovery and that plans to introduce a fuel surcharge could partly offset higher jet fuel prices.

 
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-- © Copyright Reuters 2018-8-10
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