One-Two-Go Airlines cease operating over fuel costs as legal action begins over September air disaster

Monday, July 21, 2008

A One-Two-Go Boeing 717, similar to the one which crashed last September. These older aircraft are becoming uneconomic and are contributing to the carrier's financial trouble.

Thai low-cost air carrier One-Two-Go Airlines has announced that it will be grounding all 16 of its aircraft immediately until September 15. The news comes as legal action against the airline and associated companies begins over the September crash of Flight 269, which killed 90 people, mostly foreigners.

Udom Tantiprasongchai, founder of the airline, has said conditions were hard for airlines with fuel prices having doubled within a year. He says 70% of operating costs are taken up with fuel, and the airline has already raised fuel surcharges again by 100 baht to 850 baht per leg.

"In this kind of environment, anyone can go (bankrupt) anytime," said Urdom, who declined to comment on the impact the present financial situation has had on his airline, saying only that they "are financially sustainable." He also said that the airline could return to service with ease if prices dropped, noting that, "if the situation improved with fuel prices being lowered and the profitability outlook was better, we could be airborne again."

The airline began operations in 2003; it is a subsidiary of Orient Thai Airlines. Orient Thai, which will continue to operate as normal, recently opened Thailand's first freight-only airline, Orient Thai Cargo, with a pair of Boeing 747-200Fs bought from Japan Airlines.

Urdon said that a major part of the problem is that eight of the company's aircraft are MD-11s, which consume large volumes of fuel. He also said that a collapse of a damage limitation scheme with rivals Nok Airlines and Thai AirAsia had affected his decision. Both rival carriers were also struggling financially. One-Two-Go has already cut many routes.

The news comes as the first families of victims of Flight OG269 launch legal action against the airline, as well as parent airline Orient Thai and lessor Grandmax Group. Already confirmed to be involved in the action are Richard and Margaret Collins as well as Steve and Jean Jones, parents of Alex Collins, 22, and Bethan Jones, also 22, an unmarried Welsh couple who, a few days into a round-the-world trip, were among the 123 passengers on board. Alex was reported missing but quickly confirmed to have died, while Bethan died ten days after the accident with her family at her bedside, bringing the final death toll to 90.

"We believe the air crash was completely avoidable and those responsible should be held to account. While we accept that nothing can bring Alex and Bethan and the other people who lost their lives back, we are keen to make sure we prevent this from happening again," said the families in a joint statement. "We will be forcing One-Two-Go Airlines to prove in court that they are not a low cost, low safety airline," said James Healy-Pratt, head of aviation at Stewarts Law in London. He also said that the action will be brought before courts in the United States.