Published on June 24, 2005

Hong Kong-based carrier sheds staff, looks to mainland

Hong Kong-based Dragonair will close its Phuket office next month in the wake of a sharp decrease in passengers flying to the island. The airline has already suspended its Hong Kong-Phuket flights.

Before the tsunami, the airline operated four flights a week on the route.

“If demand picks up, we could offer a chartered flight,” said Sirin Attthabodeekul, the airline’s assistant marketing manager.

The announcement brings more bad news to Phuket, which was among six southern provinces badly ravaged by the deadly waves last year.

As domestic and international tourists stay away in droves, the average hotel occupancy rate on the island has nosedived to 20 per cent.

According to the Tourism Authority of Thailand, tourist arrivals at Phuket Airport from January to April decreased 69 per cent to 128,574, from 414,340 visitors in the same period last year. During March to October last year, Phuket International Airport attracted 196 regular flights from 19 foreign airlines and 24 charter flights from nine airlines.

Before the news of Dragonair dropping its flights to the island, most charter flights had stopped and only four of the 19 foreign airlines flying into Phuket remained committed to flying there.

Those four airlines – namely Silk Air, Tiger Airways, Malaysia Airlines and AirAsia – will continue to service Phuket with a total of 38 flights a week.

In January, Dragonair also reduced the number of flights between Bangkok and Hong Kong, from 14 to 11, because of flagging demand.

Dragonair’s Phuket office closure will affect 11 employees at Phuket International Airport and its downtown office. While nine opted for voluntary resignations in August, two will be transferred to the airline’s Bangkok office, Sirin said.

Since the December tsunami Hong Kong tourists have been opting for other destinations, such as mainland China and non-Asian countries, she said.

Andy Tung, the company’s chief operating officer, said during a meeting in Hong Kong with international media, the carrier would become more active in mainland China and in other Asean countries.

“From this year and beyond, Hong Kong will be a real gateway into China both for commercial and cargo [carriers],” Tung said on the sidelines of an event marking the company’s 20th anniversary.

The airline reported that its passenger count grew 27.3 per cent in May from May 2004, while additional capacity and new destinations resulted in cargo shipments increasing 20.4 per cent. The airline ferried 418,435 passengers in May, up from 328,675 in the same month last year.

“There were two long-weekend holidays in May this year, Labour Day and Buddha’s birthday, which, along with our expanded operational timetable, saw passenger numbers rise compared with May last year,” said Stanley Hui, Dragonair’s chief executive.

Group travel was particularly strong.

But, business travel was slower in the first half of the month. This was thanks to the “Golden Week” holiday on the mainland, he said, which led to fewer people flying to cities such as Shanghai for business.

He said the airline started service to London, Frankfurt and New York in the past year.

However, fuel costs now account for about a quarter of all costs, and this is a huge concern, Hui said. The airline’s surcharges on tickets and shipments only partially cover increased costs.

Suchat Sritama

The Nation

Hong Kong

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