Thai AirAsia eyes big savings if it can move back to Don Mueang Airport

Corporate June 12, 2012 00:00


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Thai AirAsia believes it could save hundreds of thousands of baht a day in fuel costs, and thus achieve better financial results, if it were to move its operations from congested Suvarnabhumi Airport back to the old airport in Don Muang.

Currently being wooed by the authorities to return to Don Mueang Airport in order to reduce the congestion at Suvarnabhumi, the airline expects that negotiations with the airport operator, Airports of Thailand, will be finalised and revealed to the public later this month.

“We can return to Don Mueang Airport if this provides greater convenience to our cost management and our passengers,” Tassapon Bijleveld, chief executive officer of Asia Aviation, the major stakeholder in Thai AirAsia, said yesterday.

Several other airlines also want to avoid heavy traffic at Suvarnabhumi, he said. Designed to accommodate 45 million passengers a year, the country’s main airport last year welcomed 46 million travellers, thanks mainly to the huge growth of low-cost airlines.

“Thai AirAsia now serves 8 million passengers a year. Returning to Don Mueang, we can somewhat reduce the congestion at Suvarnabhumi,” he said.

Meanwhile, the company would see an improvement in fuel costs, as we could save hundreds of thousands [of baht] per day in no longer having to circle around Suvarnabhumi, waiting to land,” the CEO said.

The company targets revenue growth this year of not less than 20-25 per cent, mainly driven by the early stages of Airbus A320 fleet expansion from 24 to 48 aircraft through to 2016.

Tassapon also clarified the selling of Asia Aviation shares, which had belonged to company executives, as a big lot on the stock market, saying that it was in line with the share allocation process notified in the company’s initial-public-offering prospectus.

“We [felt we] might give a little too much of importance to retail investors. So, the investors were shocked when the shares were sold in a big lot,” he said, adding, “We insist that the shares were sold at the same price as, or not lower than, the IPO price. Also, proceeds from selling the big lot of shares were used to repay existing debts at the Credit Suisse Bank in Singapore.”

Moreover, he insisted that the group of Thai executives would remain major shareholders of Asia Aviation, up to a maximum of 60 per cent of the company’s paid-up capital.

They are also prohibited from selling shares on the market for a period of six months.