Monday, August 25, 2008

AoT may offer airlines relief

AoT may offer airlines relief

Carriers say many charges could be cut


Airports of Thailand Plc (AoT) is acknowledging the oil-driven financial pressures facing airlines by indicating that they might receive a break on airport service charges.

AoT acting president Serirat Prasutanond said the state-controlled airport operator ''may'' reduce the landing and parking fees at Suvarnabhumi Airport as requested by Airline Operators Committee (AOC), a coalition of international airlines operating in Thailand.

A straight reduction in landing and parking fees is one of the options being considered by AoT, with others including deferred fee payments, he said.

But he said his advocacy of relief to airlines is subject to approval by the AoT board after a thorough study that takes into account AoT's need to sustain its own financial performance.

Serirat: Board must look at profit too

Landing and parking fees represent about 20% of AoT's revenues, which totalled 16.66 billion baht in the first nine months of its fiscal year to June 30.

If relief is offered it would probably take effect for the airlines' winter schedules that run from late October to March, said Mr Serirat, who is also the general manager of Suvarnabhumi Airport.

In its letter to the authorities, AOC has called for assistance to enable airlines to weather the storm triggered by a tripling of fuel prices since 2006, with a twofold increase in the last year alone. The requests include:

- waiving or cutting landing and parking fees by at least 50% for 12 months;

- reducing electricity and aircraft air-conditioning charges by 30%;

- reviewing current boarding fees of 25 baht per passenger;

- reviewing concession fees imposed on ground handlers as those fees are actually passed to airlines.

AOC chairman Jaiyavat Navaraj said the adoption of this relief package alone should result in a 15% cost saving for airlines.

Furthermore, he said, airlines should not be made to pay for overtime wages for immigration and customs officers at Suvarnabhumi, a practice that is not common at other airports.

Neither should they be made to shoulder the cost of printing the immigration cards, known as TM6, for passengers.

If the cards were provided by government units, such as the Thai Immigration Bureau or the Tourism Authority of Thailand, it would save 45 million baht a year for airlines, he added.

He said that air navigation service providers also had a part to play to help airlines reduce fuel usage by allowing aircraft to reach the optimum altitude as quickly as possible in order to reduce fuel burn, and for continuous-descent arrival.

Mr Jaiyavat acknowledged that the industry had an extensive wish list, but insisted that ''extraordinary times call for extraordinary measures.''

''This is not simply an airline crisis. Airlines are an engine for national prosperity and failure among them would send shockwaves throughout Thailand's tourism industry,'' he said.

''AOC fully understands the difficulty for AoT to do these things when it is listed on the stock market but it is so critical that AoT and other related governmental sectors must eliminate archaic rules that prevent vital support to the airlines.''

As high oil prices are pushing carriers into uncharted territory, the International Air Transport Association (IATA) now sees the industry bracing for a massive loss of $6.1 billion if crude oil remains at $135 a barrel in the second half of this year.

In the last six months, a total of 25 airlines have gone bust or entered into bankruptcy protection, while many are struggling for survival, and the list of airline casualties is becoming longer.

No comments: