Volatile oil prices continue to cast a shadow over any recovery in the aviation sector, even as tourism shows signs of improvement as a result of border entry relaxations during the first quarter this year.
“The airline business has grappled with the pandemic for more than two years. Oil prices account for 30% of operational costs, and at $100-110 per barrel right now the situation has worsened,” said Nuntaporn Komonsittivate, head of commercial operations at Thai Lion Air (TLA).
TLA adjusted domestic frequencies to meet a load factor target on each flight and reduce losses from high fuel prices because the airline cannot suddenly hike airfares, particularly during the low season, she said.
Ms Nuntaporn said locals normally take fewer trips during the off-peak season. The only upside to high fuel prices is that those who travel by car might opt for air travel to avoid paying so much at the pump, she said.
The pandemic accelerated the trend of working from anywhere, and some groups are continuing to travel, said Ms Nuntaporn, while foreign arrivals have been growing after the further relaxation of travel restrictions on May 1.
TLA resumed its first international route from Don Mueang to Jakarta for three flights per week in May, posting a 50-60% load factor. The impressive performance encouraged the airline to prepare more international flights in the second half of the year, she said.
The Russia-Ukraine war, rising inflation and the Omicron variant remain important, but Bangkok Airways looks on course to rebound, said Puttipong Prasarttong-Osoth, president of the airline.
Bangkok Airways reported total first-quarter revenue of 1.7 billion baht, an increase of 25.1% year-on-year, with 400,000 passengers,…