Budget airlines seek measures to reduce financial burden

By The Nation

 

 

Representatives from five low-cost airlines namely Thai Air Asia, Thai Lion Air, Nok Air, VietJet Air, and Bangkok Airways formally requested the Finance Minister on November 13 to help them solve their financial problems, Vice Minister of Prime Minister’s Office Charnkrit Detwithak said.

 

He explained that the issue was generated by a decrease in customers from 80-100 per cent to 70-89 per cent per flight and the strengthening of the baht.

 

Even though the lower price of oil has eased business costs, budget airlines are still facing a variety of problems, which have led to the downsizing and dissolution of some airlines.

 

The airlines feel that the situation could be alleviated by lowering the excise tax for airplane fuel, currently at Bt4.726 a litre and controlling its limit on a sliding scale depending on the baht exchange rate.

 

“We are concerned about the situation of all entrepreneurs, not only low-cost airlines. The representatives have requested the setting up of a committee to seek a solution and present it to the Minister of Finance and the Cabinet,” Charnkrit said.

 

Source: https://www.nationthailand.com/news/30378323

 

-- © Copyright The Nation Thailand 2019-11-14

Follow Thaivisa on LINE for breaking Thailand news and visa info

The Thai Gov has a huge surplus so just throw some cash their way that should alleviate some of their Burdon financially anyway . 

Thought Bangkok Air was supposed to the “Boutique” company not a cheap low cost outfit

They want you all out of business so Thai can have the monopoly 

I was gonna suggest the airlines cut back on maintenance to save money, but they're probably already doing that. Never mind.

More sick patients suffering from the rampant tourist deficiency. Will the doctor allow some palliative money injections?

Edited November 14, 20196 yr by RotBenz8888

"Decrease in customers"...............but TAT states that all is OK on the tourism front?

8 minutes ago, MiNombreEsFicticious said:

I was gonna suggest the airlines cut back on maintenance to save money, but they're probably already doing that. Never mind.

Not sure cutting back on maintenance is a good idea.

That's strange. I thought the TM 30 would increase the number of budget airline passengers.

I certainly fly around Thailand on weekend breaks a lot more now that it also gives an excuse to spend Mondays at the Immigration office. Always a terrific laugh down there.

 

Edited November 14, 20196 yr by donnacha

If business gets tough, put your hand out to the government for some money. Works for Thai and the farmers and...

Don't look at your business model, ignore your customer feedback (they are just whingers) and don't look at the other ways to reduce costs and wastage...

Not according to the 4 flights I have taken this week - the flights were 100% full.

 

Maybe its poor route choices, or poor times that need to be rethought.

Are they implying that a race to the bottom isn’t a good business model?
 

In true Thai fashion, now would be a great time for 2 or 3 more budget airlines to pop up.

24 minutes ago, DLock said:

Not according to the 4 flights I have taken this week - the flights were 100% full.

 

Maybe its poor route choices, or poor times that need to be rethought.

You mean flights were full during one of their biggest holidays? That’s absurd.

Supply and demand, it's not rocket science! …...Or will yet another "stimulus package" be the answer?

Without wanting to dampen everyones joy at being able to fly in Thailand, rather than risking life and limb on a bus or in a car. There are some cold hard economics at play.

 

A route I am very familiar with; KKC-DMK/BKK

 

It's pretty much a 1 hour flight.

 

Roughly speaking it costs for an A320/B737 around $1500/Hr in jet fuel, which obviously does vary somewhat

 

The typical price of a one way ticket from KKC is around ฿1000 or approximately $35.

 

Both the Airbus & Boeing have a seating capacity of around 180, depending on configuration.

 

So assuming a load factor of 80%, thats 144 butts on seats, multiply that by $35 and the revenue for that flight is $5040. Subtract your fuel cost and you get $3540.

 

But that $1500 doesn't even come close to reflecting the total cost for the flight. You have pilots, flight attendants, landing fees, maintenance, gate agents etc, not to mention either the aircraft leasing cost, or the depreciation and interest for a purchased plane.

 

Yes they can get good load factors on domestics routes, because they are offering fares which aren't that much different from a bus, which has orders of magnitude lower operating costs.

 

So no wonder they are in trouble, just do the math!

Edited November 14, 20196 yr by GinBoy2

6 hours ago, xylophone said:

"Decrease in customers"...............but TAT states that all is OK on the tourism front?

Perhaps all those tourists take bus, train, or ship to arrive in Thailand... ????????

8 hours ago, canopus1969 said:

Thought Bangkok Air was supposed to the “Boutique” company not a cheap low cost outfit

 

 

When there is a chance of money to be saved on jet fuel, Bangkok airways is a budget airline.

 

When we are paying over the odds to fly to Samui, it's a boutique airline!

1 hour ago, Scouse123 said:

When we are paying over the odds to fly to Samui, it's a boutique airline!

A free glass of free orange juice doesn't make it a boutique airline.

10 hours ago, canopus1969 said:

Thought Bangkok Air was supposed to the “Boutique” company not a cheap low cost outfit

 

Well they try to show that image but in reality the owner will ask for any handouts that might be on offer.  By the way, it's the same owners as the Bangkok hospital network. 

10 hours ago, ChipButty said:

They want you all out of business so Thai can have the monopoly 

They wouldn't know what to do with it even if they had it !

Next it will be the Mom and Pop looking for a hand out,claiming

financial ruin because of all the 7-11 's, supermarkets,you would

think businesses would be able to solve their own financial

problems without always looking for help.

regards worgeordie

this is so typical ... too many same companies selling same <deleted> and complaining the business is going down

 

just had a robinson built next to where I live...  most of the shops were already in the other mini shopping mall a few hundred meters away from each other .... kfc's , boots, watson's, and other branches ... added value : 0

 

loud speakers shouting their product next to each other, no thank you, I will pass

 

the only good thing: finally a FUJI without having to drive 15 km, lol

21 hours ago, ChipButty said:

They want you all out of business so Thai can have the monopoly 

I hope they all go broke.

They are responsible for bringing too many people to LOS and that in turn has destroyed everything that was enjoyable about being a tourist in LOS.

18 hours ago, worgeordie said:

Next it will be the Mom and Pop looking for a hand out,claiming

financial ruin because of all the 7-11 's, supermarkets,you would

think businesses would be able to solve their own financial

problems without always looking for help.

regards worgeordie

im sure CP group gets more then there fair share of handouts 

On 11/14/2019 at 11:06 AM, canopus1969 said:

Thought Bangkok Air was supposed to the “Boutique” company not a cheap low cost outfit

 

Yes indeed as I have experienced trying to book a flight on-line from Chiang Mai to Yangon. The fare offered was a "promotion" and when I went to the "payment" tag, what appeared was vastly more expensive quoting additional fuel and administration costs, taxes and other charges on top of the fare offered. I cancelled the booking and will never try the airline again - a scam in my opinion.