Overview - One-Two-Go

One-Two-Go – Turbulent skies for Thailands first LCC

The carrier, a spin-off of regional and charter carrier Orient Thai, has had difficulties earning a positive return on investment, as domestic competition has punished its revenue line and the price of fuel has hurt its cost line.

One-Two-Go has used innovative marketing and fare promotions to attract passengers onto its aircraft, consistently recording load factors in the 70% range. But whereas it once competed only with Thai Airways inefficient domestic operation, it now has to contend with Air Asias Thai affiliate and Thai Airways low cost arm, Nok Air, as well as the flag carrier. The effect of this competition on fare levels has been predictable.

Meanwhile on the cost side, the carriers use of an ageing, heavy fleet has exacerbated the damaging effects of the high cost of fuel. Together, the two have made profits elusive.

After a discouraging first year, the carriers owner, Udom Tantiprasongchai, indicated that his tolerance for losses would wane if they reached THB60 million. However, with 2005 negative net revenues exceeding THB100 million, Udom is planning further additions to the carriers fleet and network. This perhaps owes to the success of Orient Thais regional and charter operations (which make up over 60% of group revenues), which has allowed for cross-subsidisation.

An uncertain future for dogged LCC

One-Two-Go has spoken of taking its show into the greater region, adding numerous ASEAN destinations into the network in the next few years. Supplementing its current portfolio of eight domestic routes will appeal to the customer base, but the carrier will find the competition daunting. Without a more efficient fleet or a serious drop in the price of fuel, it is tough to see a consistently profitable future for One-Two-Go.

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