Summary
- Nok Air saw a big increase in passenger numbers and revenue in 2022, however it wasn’t enough to counter rising fuel costs, exchange rate deficits, and increased maintenance charges.
- The airline reported a 225.33% increase in passenger transportation revenue and doubled its capability, carrying 4.98 million passengers last 12 months.
- Despite the positive numbers, Nok Air incurred a net lack of 2.6 billion Baht, mainly attributable to higher fuel consumption, rising fuel costs, and increased expenses for passenger services.
Thailand’s Nok Air revealed it increased passenger numbers and revenue significantly but was still unable to make up for rising fuel costs, exchange rate deficits, and increased maintenance charges.
Bouncing back
The low-cost carrier got here out of a 2021 debt restructuring following the COVID-19 crisis in a robust position to hold customers from its primary hub at Don Mueang International (DMK) in Bangkok. It increased passenger numbers dramatically and doubled capability last 12 months, carrying 4.98 million passengers in 2022, up from just 1.3 million the previous 12 months.
Revenues were also up significantly. Nok Air and its subsidiaries reported a complete revenue of seven.467 billion Baht ($202 million) in 2022, 17.47% higher than the previous 12 months. The airline says this was mainly attributable to a rise in passenger transportation revenue, which significantly jumped by 225.33% 12 months over 12 months. Service revenue also greater than doubled in 2022.
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‘Nok’ means birds in Thai and symbolizes freedom, air travel, and friendliness. The airline’s planes notably allude to this with a singular bird beak pattern on the nose of the aircraft.
Caught in a fuel crisis
Despite these promising figures, the airline’s total expenses increased significantly from the previous 12 months, reaching over 10 billion Baht. Consequently, Nok posted a net lack of 2.6 billion Baht ($70 million), compared with a 1.4 billion ($37.8 million) loss in 2021. The overwhelming majority of the corporate’s expenses got here from providing passenger services, with related costs representing a 93.26% increase 12 months over 12 months.
In response to the airline, this is especially attributable to the increased variety of flights causing higher fuel consumption than the previous 12 months and the rising cost of jet fuel. The airline’s fuel costs rose to three.26 billion Baht ($88.24 million), five times as much as in 2021. Commenting on the outcomes, the airline highlighted the changes and confirmed it was adhering to the debt restructuring plan in place:
“Operation costs also rose, primarily from higher than anticipated repair costs and provision for aircraft maintenance recognized as expenses consequently of increased utilization of aircrafts and better fuel price.
“The Company stays under the rehabilitation plan and the plan management has strictly implemented the rehabilitation plan.”
Photo: Sudpoth Sirirattanasakul / Shutterstock
The depreciation of the Baht in foreign currency markets also resulted in a 509 million Baht ($13.75 million) loss attributable to unfavorable exchange rates.
What did they do about it?
The airline took several measures to extend its revenue within the face of rising costs. It adjusted its fares in keeping with market demand to extend passenger volume and total revenue. The airline also sought to develop recent business channels to extend revenue, comparable to transporting cargo. It also launched promotions and introduced recent services to spice up sales and create awareness of the brand.
Aircraft costs were one other significant hurdle to beat. The carrier was in a position to renegotiate a few of its leases and adjusted the timing to enable aircraft to fly in additional sectors. The airline further sought to lift its liquidity and offset expenses by reducing its fleet of Q400s from eight to 2.
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The ultimate aircraft were returned to lessor AerCap in July of this 12 months and are actually listed as being in in storage at Roswell. The airline currently operates a fleet of eight Boeing 737–800 jets. The narrowbodies are almost entirely leased, apart from a single airframe (HS-DBV), which is owned by the airline.