Thai AirAsia responds to newswire report

Thai AirAsia’s has responded to a recent newswire that reported that its operations were behind projections due to rising fuel costs.

The low cost airline stated that its first half losses were fully expected as they would be with the start-up of any new airline, and were in line with its start-up projections.

Operations for Thai AirAsia began in February 2004, and up to June 30th 2004, results were better than had been planned. Thai AirAsia has to date carried over 500,000 guests with yields and costs in accordance with those budgeted.

The airline said that its projections for second half of 2004 are on track and remain favorable. Contrary to the report, Thai AirAsia said it remains committed to its low fares and sees no need to raise fares. Loads for July and August remain strong at 87% and 85% respectively.

Thai AirAsia recently cancelled its services to Nakhon Ratchatsima. Initially the Thailand’s Department of Civil Aviation had requested cooperation from each airline to service a minor domestic route. Thai AirAsia selected Nakhon Ratchatsima but that airline said that due to poor response, the route was discontinued with the approval of Thailand’s Department of Civil Aviation.

Thai AirAsia is continuing to build frequencies and introduce new routes to its existing operations. A second Bangkok-Macau service and a third Bangkok-Singapore service are expected to be rolled out in the third quarter. The airline also has plans to introduce a third Bangkok-Hat Yai daily flight.

Thai AirAsia’s Chief Executive Officer, Tassapon Bijleveld, confirmed today that “Thai AirAsia’s revenue and costs were in line with expectations for the first half of 2004. Thai AirAsia remains on the same cost structure (per ASK – Available Seat Kilometre) as Malaysia’s AirAsia. We have no plans to increase our fares, but will continue to provide low fares as a way to stimulate demand. Meanwhile, our loads are encouraging. Overall, costs are controlled, while our business remains very strong and positive for second half of year. Our plans remain on course, with the fifth and sixth aircraft expected to be in operations for the next quarter.”

AirAsia Berhad Group Chief Executive Officer, Tony Fernandes adds, “We are thrilled with the development of Thai AirAsia. After only 6 months, we have carried over 500,000 guests, built a new brand, a new distribution system and introduced 7 domestic and 3 international routes. We remain very bullish in the growth plans of Thai AirAsia.”