The budget carrier Nok Airlines expects to wipe out its accumulated losses and begin to either break even or turn a profit by the end of this year.
The airline, owned 39% by Thai Airways International (THAI), suffered a loss of 502 million baht in 2008 and still has 280 million baht outstanding that needs to clear before it can secure a positive balance sheet.
"By the end of this year, we should be able to, at least, reach break-even if not declaring profit," Nok chief executive Patee Sarasin told the Bangkok Post.
The airline expects to see a stronger balance sheet this year with projected revenue of 3 billion baht and passenger volume of up to 3.2 million.
The airline is likely to finish 2009 with a pre-tax profit of about 330 million baht on revenue of 2.3 billion baht from 2.6 million passengers, according to Mr Patee.
Like other Thai airlines, Nok saw its 2009 result bolstered by a robust traffic demand in the fourth quarter that brought about 65 million baht in pre-tax profit.
Over the past 18 months, Nok has gradually recovered from a financial crisis after launching a dramatic rationalisation in the middle of 2008 to contain losses due to spiking oil prices, global economic turbulence and over-expansion, which included the launch of international services to Vietnam and India.
The rationalisation saw the airline shedding nearly half its 1,000-strong workforce, halving its Boeing 737 jet fleet to three, terminating all overseas routes, halving flights and cutting salaries.
Nok's 2010 balance sheet will be strengthened operationally by its network expansion as it will begin the takeover of three loss-making domestic routes operated by THAI on March 1, while adding two aircraft to its fleet.
The three routes are Bangkok-Phitsanulok, Bangkok-Ubon Ratchathani and Chiang Mai-Mae Hong Son.
One more B737-400 and a second ATR 72 to be leased from THAI will enable Nok to sustain the frequencies on those routes currently offered by THAI.
Nok operates 46 domestic flights a day, deploying five B737-400s and one ATR 72.
Reflecting Nok's revived balance sheet is the management's recent decision to bonus payment and pay rise.
It agreed to give its 560 employees an initial one-month salary bonus for the 2009 performance and will pay out another amount, equal to 30% of the monthly salary, later this month.
The airline's management also agreed to offer its staff a 3-4% salary increase for 2010.
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