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Home Business BA acquires Sandbox, expects to return profit again in '67

BA acquires Sandbox, expects to return profit again in ’67


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Amidst the growth of the travel industry over the past few years, the airline business is one of the most competitive sectors. Especially, price competition, which is clearly reflected in the poor performance of the airline business since 2018-2019, which began to see a number of losses. The confrontation of the COVID-19 epidemic in 2020 makes the “critical” airline business even more severe.

“Prachachat Business” participated in an interview “Putthipong Prasat Thong-Osoth” President of Bangkok Airways Public Company Limited or BA, the executive of Bangkok Airways The overview of the airline business, business plans and directions of business operations amid the COVID crisis Including the investment plan of Bangkok Airways Group as follows:

Putthipong Prasatthong-Osoth President, Bangkok Airways Public Company Limited or BA

The airline business continues to collapse.

“Putthipong” said that after the first round of the coronavirus outbreak The overall picture of the aviation business began to improve in the last quarter of 2020, and passengers began to travel again. The total travel bookings of Bangkok Airways on all routes in early December entered more than 5,000 people a day (from the normal period before COVID more than 10,000 people per day), resulting in the travel bookings during the New Year 2021 start. Come back to bustle

But when encountering a new wave of outbreaks The travel booking is agreed immediately. And less than 1,000 people a day left, until the lowest drop to more than 200 per day in January 2021

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It is called the lowest “number” in the history of Bangkok Airways in operation.

“During the past January, Thai people almost stopped traveling again. As we saw signs in the last quarter of last year that the situation was starting to turn good. Therefore began to open more routes again Finally, the passenger does not travel. We have already opened the flight path, so we could not reduce it in time. Had to bear the cost Until now, the average number of passengers is around 1,000 people a day, but still does not return as from November to December last year. Except during Friday, Saturday and Sunday only Causing our overall picture to come back to the foothold again “

Gradually adding flight routes in Thailand

“Putthipong” said that at present, the airline “Bangkok Airways” offers 8 domestic routes, including routes from Bangkok (Suvarnabhumi) to Samui, Krabi, Phuket, Chiang Mai, Lampang, Sukhothai, Trat and Hat Yai-Phuket. In total, about 20 flights per day (round-trip), there are 39 aircraft in total, currently only 15 aircraft are used, the remaining more than half can not do anything. Must continue to park in the parking lot

However, the Company still plans to add more routes in line with the demand of the market as well, such as the Bangkok-Mae Sot route. In june (The original plan that was postponed from the pre-COVID crisis), then plans to add the route Phuket – Samui. And Phuket – Utapao in July And Chiang Mai-Phuket route And Chiang Mai – Krabi In this October

It is expected that within this year “Bangkok Airways” will return to service domestic flights approximately 30-40% compared to the period of 2019 (before COVID) because it has not been able to increase the frequency of flights for each route as much.

PTTEP will receive a sand box

As for international routes, Putthipong said that if all plans are in line with the timeline of exposure to foreign tourists without detention or by the government’s sand box (sandbox) model, starting with measures Reduced detention days to 7, 10 from this April in 6 major tourist cities.

And stop detaining tourists to Phuket in July And October quit detaining foreign tourists in the other six major tourist destinations, it would be a good opportunity to re-start international routes again.

By now, studies have begun to open international and domestic routes to support sand box models as well, using the Samui aviation hub. (Surat Thani) such as the route Samui – Singapore, Samui – Hong Kong in July. And the route Bangkok – Phnom Penh (Cambodia), Bangkok – Yangon (Myanmar) in October.

It also studies and prepares to launch a number of routes to China. Including to study the plan for the rest of the aircraft Come back with

“All of this is a plan that we are prepared for, because at this time we estimate that by then the overall situation of the COVID should be resolved in a better direction. It will open sooner or later, depending on the country of destination, how ready he is to open the country. “

And not just international flight routes “Bangkok Airways” also plans to launch domestic routes to support sand box models as well, namely Phuket – Samui, Phuket – U-Tapao, Chiang Mai – Phuket. And Chiang Mai – Krabi Which is planned to open in July and October

Passengers – ’64 income is lower than ’63.

When asked about the passenger and revenue forecast for this year, Putthipong said overall for 2021 estimates that both passenger numbers and revenues will be lower than last year with about 1.61 million passengers. And total passenger income of approximately 3,392 million baht, lower than the year 2020 with 1.89 million passengers and passenger income of 5,558 million baht, due to the year 2020 the revenue for the first 2 months (January – February) is higher than that The same as of 2019

“In 2019, before the COVID crisis, we had 5.86 million passengers, total passenger revenue of 19 billion baht. The total income forecast for 2021 is 40% lower than that of 2020, and compared to 2019, it is still 80% lower. ”

However, for the year 2021, going on to 2022, the company should be the year in which it will be able to better manage some of its costs. Especially the cost of aircrafts. Because there are planes that have expired and have to return 1 aircraft after the last year, 1 aircraft has been returned and there are plans to return 6 more next year.

Set a target for the year ’67 to return to profit

Putthipong said that from this plan, it is expected to bring back about 30-50% of revenue and passengers in 2022 and increase to 60-80% in 2023 and return to or close to the same year. By 2024, in line with the forecasts of the International Air Transport Association (IATA).

And expect that the year 2024 should be the year that “Bangkok Airways” has returned to gain “profit” again in five years after facing the COVID crisis …

Utapao-MRO new jigsaw, Bangkok Airways

“Bangkok Airways” still estimates that the Thai and global aviation business is still not very bright and it will take 4-5 years to recover the business as close as possible. In 2019 or before the coronavirus crisis

Utapao

But “Putthipong Prasat Thong-Osoth”, Mr. Yai still believes that With existing assets Whether it is an office building, airplanes, airports (Samui, Sukhothai and Trat), etc. make the Bangkok Aviation Company Or Bangkok Airways Affected by working capital is not as heavy as some airlines Still able to borrow financial institutions to be in circulation to a certain extent

More importantly, it also gives the company the potential for continued investment as planned, with the two large investment projects currently planned: Development Project of U-Tapao Airport and Eastern Aviation City Joint investment projects between the government and the private sector with an investment of approximately 2.9 billion baht.

Putthipong said that the development project of U-Tapao Airport and the Eastern Aviation City It is a large investment with two partners, TS Group Holdings and Sino-Thai Engineering. Which has been financed by the bank Initially, the first phase is expected to spend approximately 30,000 million baht.

Construction will begin in 2022 and complete in 2025 to accommodate 15.9 million passengers per year. “The third major commercial international airport” connects Don Mueang and Suvarnabhumi airports by high-speed trains.

The other project is Aircraft Maintenance Center or MRO Project in the Eastern Special Development Zone or EEC, where the company has already informed of its intention to invest At this time, it is in the process of requiring the maintenance department to make information for presentations. It started with four narrow-body aircraft under the name of the Bangkok Airways aircraft repair shop project in the EEC area.

It is expected that the whole project will cost an investment of approximately 1,000 million baht, initially the first phase should have an investment of approximately 500-600 million baht (support two narrow-body aircraft).

If all goes according to plan, it can be time to complete the Environmental Impact Assessment, or EIA, in 2022, start construction in 2022 and complete in 2024.

“We think that Thailand does not have a repair center. The parts that exist are only the repair centers of each airline that repair their own aircraft, but that we are in this area should be able to do a good cost and be able to compete with other countries whether it is. Singapore, Indonesia or the Philippines “

“Putthipong” also said that If looking longer for another 4-5 years or in the year 2025, both the development of U-Tapao Airport and the Eastern Aviation City And the MRO aircraft maintenance center project in the Eastern Special Development Zone or EEC is completed, it will be the year that the airline business can turn around. And has the potential for earning and profit as well

And on that day, the company was able to take the airline business to expand the business of “U-Tapao”, whether it was looking for aviation partners. Or using U-Tapao as a major aviation hub of “Bangkok Airways” and so on.

Simply put, these two big projects will be the new “jigsaw” that will help further “Bangkok Airways” is enormous, of course …

Read original news: BA defends Sandbox, expects to return profit again in ’67

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