Thailand's One-Two-Go grounds half its fleet due to weak economy

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High fuel prices and a faltering economy have led Orient Thai Airlines to scale back the flight operations of its low-cost carrier One-Two-Go and ground half that airline’s fleet of Boeing MD-80-series aircraft.

Orient Thai CEO and managing director Udom Tantiprasongchai says One-Two-Go is only operating five of its 11 MD-80-series aircraft and two months ago it reduced the frequency of its services.

“We reduced services two months ago because the [domestic] economy is so bad,” says Udom.

He says increases in fuel prices are of concern and in Thailand jet fuel prices are higher than in some other countries because airlines have to pay value-added tax.

Udom says One-Two-Go plans to return to service some of its MD-80-series aircraft when the peak tourist season starts in October.

one-two-go md-80
 © Jeroen Hribar/AirTeamImages.com

He stresses that One-Two-Go is just one of several airlines in Thailand that has scaled back operations in recent months because of the poor economic situation.

Udom also says he is unperturbed about having to make payments on aircraft he is unable to use because his MD-80s are mostly on finance leases rather than operating leases so paying the installments means the airline will eventually own the aircraft.

According to One-Two-Go’s website it operates from Bangkok Don Muang airport to six domestic destinations: Chiang Mai, Chiang Rai, Phuket, Hat Yai, Surat Thani and Nakorn Si Thammarat.

Its major competitors are Nok Air and Thai AirAsia. In recent days Nok Air has announced it is dropping some routes and scaling back services on some others.

Orient Thai Airlines, meanwhile, operates a fleet of Boeing 747-100/200/300s, two of which are freighters.

Udom says the freighter operation has suspended services to Singapore because of low demand but it is continuing to serve Hong Kong.

The passenger operation continues to operate from Bangkok to Hong Kong and Seoul and from Phuket to Hong Kong, says Udom.

When asked if the airline is looking to sell some of its 747s to raise cash, Udom says he is not ready to sell any but is looking at more fuel-efficient aircraft such as Boeing 777s so it can eventually start to phase out some of the 747s.

Udom also confirms one of his 747s is now wet-leased to Biman Bangladesh Airlines. Biman’s general manager of planning, Belayet Hossain, told ATI in June that the airline had signed an agreement with Orient Thai to wet-lease for one year a 747-200.

Source: Air Transport Intelligence news