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Airline business is not just about prices but also about belonging to a community

Luc Citrinot, eTN  Oct 26, 2010

BANGKOK (eTN) - Nok Air indirectly came back under media spotlights when shareowner Thai Airways International announced in early August to go along with Singapore-based Tiger Airways to create a new low-cost carrier. How then will Nok Air position between Thai Airways and Thai Tiger? Patee Sarasin, Nok Air CEO, unveils his strategy to secure the airline’s future to eTurboNews.

eTN: Nok Air was created to fill up a void in the low-cost segment for Thai Airways. Why did Thai Airways need then to look for a new carrier and how do you see Thai Tiger arrival?

PATEE SARASIN - I must stress first of all that Nok Air is a domestic carrier and will still remain in this domestic segment for a foreseeable future. We have worked now for a long time with Thai Airways to help them to consolidate their positions in the domestic market by taking over some of their routes. However, Thai Airways identifies a need also to compete in the low-cost segment on regional sectors. And what they wanted us to do is beyond our current capacity. We could start flying international routes, but we can’t do it now. I am personally not against the idea of Thai Airways looking for another partner. This is their decision and we respect it.

eTN: Might Thai Tiger jeopardize your own plans to fly international routes in the future?

PATEE SARASIN - It takes time to establish a name abroad and secure business. We had the experience before, when we started flying to Hanoi and India, but we lost money on both routes because of the sharp rise in fuel costs and despite high load factors! We have to be better prepared. We learned from our first international experience to be more selective. But we will definitely fly regional routes, probably in two years' time. We already started the process of mapping out the routes that we could eventually serve.

eTN: How is Nok Air doing on the domestic front?

PATEE SARASIN - I must say that this year is truly exceptional for us. We have experienced no low season at all. Our load factor reaches on average 89 percent, and we expect to carry 2.5 million passengers this year. Our domestic strength has, in fact, helped us to upset the consequences of the political crisis earlier this year. While foreign visitors have stayed away from Thailand, we continued to see domestic passengers flying within our country. We have increased our fleet to integrate two ATR for small domestic routes and operate six Boeing 737-400. We are profitable, even on the smaller routes flown with ATR aircraft. Our aim is to continue to offer more flights to small or medium-sized cities in Thai provinces. We are now seriously looking at soon launching flights from Bangkok to Narathiwat in the deep south. We also now embark into modernizing our fleet. We selected the Boeing 737-800, an aircraft which will dramatically reduce our costs in kerosene or maintenance. We are looking to get six to seven B737-800 with delivery starting next year. These aircraft will also give us the possibility to fly to destinations located up to four hours away from Bangkok.

eTN: How do you attract people to fly with you as low-cost competition is intense in Thailand and as you do not always offer the lowest fares?

PATEE SARASIN - We are not only looking at the fare aspect. This is important to offer competitive price, but we think that this is also extremely important to belong to the community we serve. We have a dynamic promotion program in most medium- and small-sized cities of our network. We organize, for example, events and festivities every month in various cities. For example, we recently helped to organize an event at the Night Safari Zoo in Chiang Mai. We will also in November take part in activities in Ubon Ratchathani. People should feel that Nok Air is really part of their daily life.

eTN: Are you looking to provide additional technologies or services to passengers?

PATEE SARASIN - We have always looked at ways to innovate in services and technologies. We were the first in Thailand to allow booking and paying through iphones. As part of our commitment to communities, we integrate more and more other means of transportation beyond our flights. We just launched a fast catamaran service from Nakhon Si Tammarat to Samui Island as a cheaper alternative to other carriers. Passengers flying out of Bangkok [in the] early morning can now be before noon in Samui. We are now looking at ways to integrate bus services into one single ticket.

Airline business is not just about prices but also about belonging to a community
Patee Sarasin, CEO Nok Air / Photo by Luc Citrino

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