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Abu Dhabi, UAETuesday 11 December 2018

Bangkok Airways eyes Airbus, Boeing and Bombardier for 20-plane order

Bangkok Airways earlier this year signed a deal to buy four ATR 72-600 turboprops to replace older versions of the plane

A passenger aircraft, operated by CityJet Ltd., takes off towards the Canary Wharf financial, business and shopping district at London City Airport (LCY), in London, U.K., on Tuesday, Aug. 8, 2017. The chief Brexit concern of carriers is to maintain a single market for air travel which would allow existing routes between Britain and the EU to continue. Photographer: Simon Dawson/Bloomberg
A passenger aircraft, operated by CityJet Ltd., takes off towards the Canary Wharf financial, business and shopping district at London City Airport (LCY), in London, U.K., on Tuesday, Aug. 8, 2017. The chief Brexit concern of carriers is to maintain a single market for air travel which would allow existing routes between Britain and the EU to continue. Photographer: Simon Dawson/Bloomberg

Bangkok Airways will soon submit specifications for an order of 20 narrow-body planes to Airbus, Boeing and Bombardier, its president Puttipong Prasattong-Osoth said.

The carrier, which currently has 12 Airbus 319s and nine Airbus 320s, will pick one manufacturer for the order by the end of the year, Mr Puttipong said.

"The good thing is, once we change our planes to all be the same model, the cost of operation and maintenance will be lower," he said.

The full-service carrier is striving to support earnings by containing costs as oil prices climb and fierce competition limits pricing power. Shares in Thailand’s airlines have struggled because of such pressures, despite the kingdom’s unprecedented tourism boom of recent years. Bangkok Airways has tumbled more than 40 per cent since listing in 2014.

"Every year we manage to post profits," said Mr Puttipong. "But when it comes to the stock price, it really is a complicated mechanism - one that we can never anticipate."

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He estimated revenue will climb about 8 per cent in 2018 from 28.5 billion baht (Dh3.25bn) last year. Aside from the pending order for narrow-body planes, Bangkok Airways earlier this year signed a deal to buy four ATR 72-600 turboprops to replace older versions of the plane.

Anawat Leelawatwatana, senior vice-president for finance and accounting at Bangkok Airways, and ATR's Chief Executive Officer Christian Scherer, sign a deal for 4 ATR 72-600s at a ceremony at the Singapore Airshow February 7, 2018. REUTERS/Brenda Goh
Anawat Leelawatwatana, finance chief at Bangkok Airways, and ATR's CEO Christian Scherer, sign a deal for ATR 72-600s. Brenda Goh/Reuters

Mr Puttipong also said Bangkok Airways could boost its 33 per cent stake in Samui Airport Property Fund if the opportunity presents itself and the timing is right.

The carrier plans to build a maintenance, repair and overhaul centre in Sukhothai province and is targeting a passenger load factor of about 70 per cent for 2018, he said.

"A lot of full-service airlines are facing heavy competition in the aviation industry," said Amnart Ngosawang, an analyst at Ktb Securities (Thailand) in Bangkok, adding that fuel costs have sapped sentiment toward the stock.