Unfinished mission at Nok Air

The carrier's boss says he's focused on the job and not looking for a parachute.

Rather than worrying about rumours of his imminent dismissal as chief executive of Nok Air, Patee Sarasin says he's preoccupied with turning the loss-ridden budget airline around.

Speaking to the Bangkok Post yesterday, Mr Patee shrugged off suggestions that certain elements at Thai Airways International (THAI), which holds a 39% stake in Nok Air, want to oust him after last year's record loss of 3.28 billion baht.

"I can't just jump ship, I'm responsible for getting Nok Air back in the black by ensuring that the recovery plan focused on cost cuts now in place is properly executed," said the 55-year-old, who has led the airline since its founding 13 years ago.

None of the powers-that-be at THAI has ever indicated to him that he should leave the post, Mr Patee insisted.

"I will stay on as long as needed, though I've never thought I was indispensable at Nok Air," he said.

Press reports have hinted that removing Mr Patee is part of THAI's new strategy for two affiliated airlines -- Nok Air and the wholly owned THAI Smile -- to work more harmoniously and effectively with the flag carrier under the so-called THAI Group.

Mr Patee pointed to an existing plan of cost reductions, revenue increases and improving yields now being vigorously pursued, with the goal of enabling the embattled airline to break even towards the end of 2017.

"A successful implementation of the exercise will uplift Nok Air [to profitability] again next year," he said.

The turnaround is to be supported by a planned 1.5-billion-baht capital injection to the airline, which was capitalised at 625 million baht, in the next few months.

Nok Air has rolled out a "housecleaning" project to trim all costs and renegotiate contracts with suppliers.

Shedding some excessive aircraft capacity forms a key part of Nok Air's turnaround plan.

The carrier recently struck an accord to sublet three Boeing 737-800 jets to the Indian low-cost carrier SpiceJet for a period of five years, according to Mr Patee.

Until recently, Nok Air's fleet comprised 22 B737-800s, eight Bombardier Q400s turboprops and two ATR 72-500 turboprops.

Last year, the airline took delivery of five brand-new aircraft: three B737-800s and two Bombardier Q400s. The influx was quite large for a single year and contributed to aircraft glut.

The vast Chinese market will be key to boosting the airline's revenue and yields with the debut of six routes this year: Phuket-Chengdu, Chiang Mai-Nanjing, Phuket-Nanjing, Bangkok-Nanning, Bangkok-Linyi and Phuket-Wuhan.

Longer flights on international routes tend to be more viable than Nok Air's past focus on domestic services, which Mr Patee acknowledged was a mistake.

Domestic yields are tight and at times unfeasible because of fierce competition, one of several factors painting Nok Air's balance sheet red over the past three years.

Nok Air's China penetration will be a joint effort under THAI Group's expansion, Mr Patee said, expressing surprise at suggestions that Nok Air had declined cooperation with THAI in marketing.

Meanwhile, Mr Patee and three other top executives at Nok Air have made a voluntary decision to cut their salary by half or by 25%, effective from January this year, to demonstrate their contribution to the cost-saving code embraced by the airline.

"That does not really mean much [in terms of reducing cost], but we want to send out a clear message that we're responsible for past financial performance," Mr Patee said.

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