UPDATE 2-Thailand's Nok Air expects return to profit in Q4 -CEO – Reuters

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* Profit would be first in 18 months
* To boost profitability by extending aircraft flight time
* Domestic share to fall to 20 pct from 25 pct (Adds quotes, tourism context)
Aug 1 (Reuters) – Thailand’s Nok Airlines PCL is on track to book its first quarterly profit in a year and a half come December, as more pilots will help the budget airline avert cancellations during the tourism high season, its chief executive said Monday.
The country’s second-largest budget carrier after Thai AirAsia will also raise profitability by increasing its aircraft daily flight time to eleven hours from eight, Patee Sarasin said in an interview.
“By Q4 we should reach profitability because we believe that by October we should be able to use our aircraft for 11 hours,” Patee said.
Nok Air, 39 percent owned by national carrier Thai Airways International PCL, posted a net loss of 726 million baht ($20.90 million) in 2015, and continued to lose money in the three months through March – its latest reporting quarter.
The airline blamed the losses on an insufficient number of pilots, and a downgrade of Thailand’s safety rating in December by the U.S. Federal Aviation Administration.
The lack of pilots forced the airline to cancel flights, contributing to a decline in overall market share in the first quarter to 19.7 percent from 27.9 percent a year earlier.
Its domestic market share was 25 percent at the end of 2015, and Patee said he expects that to fall to 20 percent this year.
Tourism is one of Thailand’s biggest sources of income, and the sector continues to be vibrant after weathering political turmoil and the airline safety downgrade.
The country is set to receive a record 32 million visitors this year, compared with 30 million last year, largely driven by tourists from nearby China, the tourism ministry said.
The influx has increased the urgency for expansion at main entry points, such as Don Muang International Airport in the capital Bangkok and Phuket International Airport which serves a popular seaside resort, Patee said.
“Slots at airports are packed so it’s going to be even crazier as we press forward.”
Nok Air aims to take delivery of three aeroplanes this year to expand its fleet to 32, Patee said.
“We’re also putting a lot of effort into safety training,” Patee said. “Nok Air this year is going through house cleaning.”
$1 = 34.7400 baht Reporting by Amy Sawitta Lefevre and Manunphattr Dhanananphorn; Additional reporting by Khettiya Jittapong; Editing by Christopher Cushing
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