Bangkok Airways expects its profit margin this year to be squashed by higher fuel prices and operating expenses.

"The move to Suvarnabhumi Airport has increased the operating costs of nearly all items," president and CEO Prasert Prasarttong-Osoth said yesterday.

The "boutique" airline's profit is estimated to fall from 7 per cent of revenue last year to only 2 per cent of this year's targeted revenue of Bt9 billion, he said.

Bangkok Airways recently hiked the round-trip economy-class airfare on its Bangkok-Samui service from Bt7,100 to Bt9,760, but all flights to the resort island during the high tourism season - December to January - are already fully booked. The airline also raised the "M" class ticket price by Bt100 per trip but passengers with a Samui resident card would enjoy a 35-per-cent discount so that they would not be affected.

The Samui flights, which carry 600,000 passengers a year, generate 40 per cent of the airline's total revenue. Passenger traffic has increased 15 per cent annually.

"We raised the fares for the first time in five years, amid an increase in operating costs," Prasert said.

Bangkok Airways, the operator and exclusive user of Samui Airport, has not dominated the route, he said. Thai Airways International has tried to operate flights to the island, but without success, not because of Bangkok Airways but because of environmental regulations.

Flights at the airport are limited to 34 per day - 18 by jets and 16 by ATR planes - out of concern for noise pollution. During high seasons, the airport operates at full capacity and no room is left for THAI, he said.

"If THAI wants to operate on the route, the Natural Resources and Environmental Policy and Planning Office would need to grant permission for more flights," he said.

Bangkok Airways needs to operate every service at full capacity during the high season to offset expenses incurred during the low season, he added.

Watcharapong Thongrung

The Nation