Thai Nok Air posts 2015 net loss, hit by pilot shortage and loss at JV

[BANGKOK] Thai budget carrier Nok Airlines reported a net loss for a second consecutive year on Friday, hit by fierce competition, a shortage of pilots which forced it to curtail flights, and losses at joint venture NokScoot.

The earnings announcement comes after Nok Air cancelled several flights in the past two weeks, prompting the country's civil aviation authority to investigate.

Nok Air, 39.2 per cent owned by flag carrier Thai Airways International Pcl, posted a 2015 net loss of 726 million baht (S$28.5 million), versus a 472 million baht loss in 2014, it said in a statement.

The loss contrasts with annual profits at some other budget and full-service carriers.

Asia Aviation Pcl, a major shareholder of Thai Air Asia, reported a near six-fold jump in 2015 net, while Bangkok Airways posted a near five-fold surge in its annual profit.

Nok Air said it carried 7.95 million passengers in 2015, up 11 per cent from year earlier, but lower than the 23 per cent rise of the overall market because of the entry of newcomers and capacity expansion by existing rivals.

Nok Air's 2015 market share fell to 26.26 per cent from 29.15 per cent, it said.

The airline's cabin factor, the number of seats sold, was a high 84.03 per cent, but intense pricing competition pushed its revenue per passenger down 6.64 per cent to 2.11 baht per seat per kilometre, it said.

Nok Air also booked one-time expenses and a loss from NokScoot, a long-haul low-cost carrier that is a joint venture with Singapore Airlines unit Scoot.

NokScoot made a net loss of 1.22 billion baht in 2015, as its expansion to north Asia was impacted by concerns over safety standards raised by the International Civil Aviation Organisation, Nok Air said.

The Thai aviation authority is also examining financial positions of Thai registered airlines as part of the military government's attempt to improve the country's aviation standards following a downgrade by the US Federal Aviation Administration in December.

Nok Air shares were down 2 per cent on Friday in a broad market that was up 0.3 per cent. Nok Air shares have fallen by nearly half over the past year.

REUTERS