Posted on: 03 March 2015 by Ross McSweeny
Nok Air has announced its financial results for 2014, with the company and its subsidiaries recording a net loss of Baht 471.7 million, a decline of more than 20% compared with the previous fiscal year.Explaining the factors and events affecting the results, Nok Air noted that in 2014, low-fare airlines had to confront various challenges such as overcapacity resulting from the ongoing fleet expansion of several budget airlines as well as the entrance of new players, which it says “led to even more intense pricing wars”.In 2014, the number of domestic flights operated by budget airlines rose as much as 18.6% over 2013, while the growth rate of domestic air passengers was merely 10.1%. In addition, the political unrest which continued from late 2013 into the first half of 2014 directly affected Thailand’s economic and tourism sectors also thus impacted the budget airline industry. Exchange rates and fluctuating Jet A-1 aircraft fuel prices were also critical factors affecting the airline’s operating costs.Although Nok Air maintained its a high load factor of 81.3% during 2014, its revenue per available seat kilometre (RASK) was only Baht 2.26, down 14% from the previous year. The cost per available seat kilometre (CASK) was Baht 2.36, a drop of only 1.3%. In 2014, Nok Air on its own recorded a net loss of Baht 410.5 million, a drop of Baht 1,476.6 million from the Baht 1,066.1 million net profit it generated in 2013.As mentioned, Nok Air and its subsidiaries recorded a net loss of Baht 471.7 million in 2014. Contributors to that results was a Baht 61.2 million loss in subsidiaries based on its shareholding ratio. The majority was from the loss in NokScoot Airlines due to its business being in the start-up phase.In 2014, Nok Air and subsidiaries recorded Baht 2,460 million net cash used in operating activities; Baht 2,728 million net cash provided by investing activities; Baht 458 million net cash provided by financing activities and a Baht 7 million effect from exchange rate changes. As of 31 December 2014, Nok Air’s cash and cash equivalents totalled Baht 2,927 million.