Low-cost carrier Thai AirAsia posted a loss last year as it faced more intense competition and higher costs.

This is according to the airline’s CEO, Tassapon Bijleveld, who told journalists in Bangkok that the carrier has had to pay lessors penalties for breaking leases on some of its Boeing 737-300s and had to spend money on maintenance to get these aircraft ready to be returned.

He says the penalties and extra maintenance costs are one-off expenses and he predicts the carrier will return to profit this year.

Some reports quoted Tassapon as saying the carrier suffered a loss of one billion baht ($32 million) last year but 49% owner AirAsia of Malaysia has since clarified that this was not the case, although its results have yet to be finalised.

“A loss is expected mainly due to intense competition in Thailand through rampant undercutting combined with adverse effects of higher fuel cost, and [a] one-off charge attributable to a change in accounting policy in relation to accounting for maintenance reserves to be in line with industry practice which has already been adopted earlier by AirAsia,” it adds.

Tassapon says high fuel prices led to the carrier’s decision to return the 737s early and rely more on new Airbus A320s.

The carrier also says in a statement dated yesterday that it currently has three Airbus aircraft and a dozen 737-300s and that by the end of this year it will have returned five 737-300s and received five more A320s, bringing the fleet to eight A320s and seven 737s.

It also says five more A320s will be coming in 2009, bringing the A320 fleet to 13, and Tassapon told journalists the 737 fleet will fall to two in 2009.

According to Flight’s ACAS database Thai AirAsia owns four 737-300s and the rest of are owned by a mix of lessors such as GE Commercial Aviation Services and Wells Fargo Leasing.

Thai AirAsia’s statement also says the carrier will be establishing a maintenance training organisation in Thailand this year.

A Thai AirAsia spokeswoman in Bangkok says it will be established in joint-venture partnership with an existing training organisation in Thailand that already trains aircraft maintenance engineers but she was unable to elaborate.

She also says because the carrier is returning some of its 737-300s it will be launching few new services this year.

Tassapon told ATI in October that the carrier hoped to launch a Bangkok-Hong Kong service in December 2008 but was having problems getting Hong Kong airport to provide appropriate time slots.

“For now I don’t think we’ll be flying to Hong Kong and he [Tassapon] is just saying the carrier is looking to” launch services this year from Bangkok to Jakarta, she says.

Tassapon also said in October that Thai AirAsia was eyeing secondary cities in southern China such as Chengdu, Chongqing, Haikou, Kunming and Nanning.

The spokeswoman says the carrier might still launch services this year to some of these cities.


Source: flightglobal.com's sister rpemium news site Air Transport Intelligence news

Source: FlightGlobal.com