Government Approves CAAT Plan to Tackle Soaring Ticket Prices

[snoop1130]

 

BANGKOK (NNT) - The Ministry of Transport has been instructed to address the issue of skyrocketing plane tickets in the short and long term, with the Civil Aviation Authority of Thailand (CAAT) formulating a five-point strategy to solve the problems impeding the tourism industry’s recovery.

 

According to Deputy Transport Minister Atirat Ratanasate, the ministry has informed Prime Minister Gen Prayut Chan-o-cha on the progress as well as future steps to combat soaring ticket prices caused by demand increases after the Covid-19 outbreak. During the meeting, the ministry presented the plan developed by CAAT that includes increasing ground-handling operators, relaxing certain rules, offering incentives for airlines, and implementing a subsidy policy to help airlines fly to less popular destinations in the country.

 

The deputy minister said that the Prime Minister, after hearing these strategies, told officials to proceed with its plan in order to address the problem as soon as possible. Gen Prayut has also ordered CAAT to closely monitor domestic ticket prices and has advised the public to plan their trips ahead of time, especially during holidays, to avoid purchasing expensive tickets.

 

Full Story: https://thainews.prd.go.th/en/news/detail/TCATG230407150754978

 

-- © Copyright NNT 2023-04-07

 

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[JoePai]

If demand increases should the cost (fares) not decrease ?

[racket]

5 minutes ago, JoePai said:

If demand increases should the cost (fares) not decrease ?

If there's not enough supply, no. But higher prices eventually cures higher prices, whether that comes from increased supply or people unwilling to pay. A recession in the global economy would drastically bring prices down, in a possibly deflationary environment. 

[ukrules]

22 minutes ago, JoePai said:

If demand increases should the cost (fares) not decrease ?

You would think so but I guess that depends on how much the airports and government are demanding in payments and commitments from the airlines to use the airports.

 

[sammieuk1]

Gen Prayut's last order hopefully before grounding ???? 

[Trip Hop]

12 hours ago, JoePai said:

If demand increases should the cost (fares) not decrease ?

Basic rule of supply and demand. They’ll continue to sell at as much as possible until people are no longer willing to pay it and won’t come. The problem is that the post Covid surge is there but most of the airlines are yet to reinstate their pre-Covid timetables. 

[hioctane]

12 hours ago, JoePai said:

If demand increases should the cost (fares) not decrease ?

It decreases due to competition but at the moment airlines don't feel the need to cut fares because there is not enough supply.

[bbbbooboo]

Maybe more people should not be willing to pay these inflated prices and find alternative transport . I wont be.

[bradiston]

"During the meeting, the ministry presented the plan developed by CAAT that includes increasing ground-handling operators, relaxing certain rules, offering incentives for airlines, and implementing a subsidy policy to help airlines fly to less popular destinations in the country."

 

How exactly does this plan "tackle soaring ticket prices"? Seems to involve more costs, not less.

[Andycoops]

Unfortunately neither Too or CAAT understand basic economics, that of supply and demand.

Anything controlled by a government rather than private business is doomed, just look at all the tax payers money lost at Thai airways as a example.

[hotchilli]

13 hours ago, JoePai said:

If demand increases should the cost (fares) not decrease ?

No they will increase as normal.

[brommers]

As ever there is nothing more to the plan than a few words on paper. The cost areas where they propose changes are on the margin and even making all charges zero would only have a minor effect because the big costs are not being, and cannot be reduced by government intervention. The reason why ticket prices rise are partially affected by costs but also by the airline yield management systems which increase prices in line or even ahead of increasing demand. Because available capacity is limited and an unsold seat is an operating cost airlines can charge higher prices if demand exceeds supply, which is currently the case. Of course Prayuth has no concept of the real world and is only trying to electioneer with this issue. Prices will only fall when supply exceeds demand and that isn't going to be anytime soon.

[mikebell]

53 minutes ago, bradiston said:

relaxing certain rules

This is disturbing.  Which rules?  Security?  Maintenance? Service?

[PETERTHEEATER]

13 hours ago, sammieuk1 said:

Gen Prayut's last order hopefully before grounding ???? 

The article says it is an 'instruction '. Anutin is Acting Minister of Transport which might be more within his capability than Health. Nah.......forget it.

[ThaiFelix]

14 hours ago, JoePai said:

If demand increases should the cost (fares) not decrease ?

Why of course, that would be plainly logical, but.....TIT, same same but different lol!

[Bangkok Barry]

14 hours ago, snoop1130 said:

Full Story: https://thainews.prd.go.th/en/news/detail/TCATG230407150754978

There isn't any more to the story. The full story is already there without the link. And, as others above have pointed out, that story tells us very little. 

[dinsdale]

It's pure price gouging. 

[zzaa09]

A novel idea - why not allow the natural marketplace to work it out on it's own......without government intervention [regarding most everything].

[Pink Mist]

14 hours ago, JoePai said:

If demand increases should the cost (fares) not decrease ?

That is how supply and demand normally works...

[zzaa09]

Just now, Pink Mist said:

That is how supply and demand normally works...

Not in today's cheating profit-expanding world. 

[ThailandRyan]

14 hours ago, snoop1130 said:

the Civil Aviation Authority of Thailand (CAAT) formulating a five-point strategy to solve the problems impeding the tourism industry’s recovery

So what exactly is the 5 point strategy because the quote I posted below is definitely not it.

 

14 hours ago, snoop1130 said:

During the meeting, the ministry presented the plan developed by CAAT that includes increasing ground-handling operators, relaxing certain rules, offering incentives for airlines, and implementing a subsidy policy to help airlines fly to less popular destinations in the country.

If less popular destinations are just that,less popular, why provide a subsidy to the airlines, just reduce the ticket prices to almost free, promote the locations and give vouchers to ALL travelers going there not just Thais.

[ThailandRyan]

14 hours ago, sammieuk1 said:

Gen Prayut's last order hopefully before grounding ???? 

Last Order, again it's a caretaker government and they can not incur any new expenses for the country and its people except to continue running current policies that are still in play, not creating new ones. That is up to the new government to decide.

[Chongalulu]

27 minutes ago, ThaiFelix said:

15 hours ago, JoePai said:

If demand increases should the cost (fares) not decrease ?

Why of course, that would be plainly logical, but.....TIT, same same but different lol!

So that’s two people not understanding the basic rule of supply and demand…. ????‍♂️ 

[Pink Mist]

11 minutes ago, zzaa09 said:

Not in today's cheating profit-expanding world. 

Is it really cheating, or just profiteering to make up what they lost in the past few years. How does that compare to regular everyday people who cheat others.  Just my take on it. Normal people can never recoup what they have lost to the greed of corporations and whose money always stays the same as far as income goes.

[Chongalulu]

20 minutes ago, Pink Mist said:

15 hours ago, JoePai said:

If demand increases should the cost (fares) not decrease ?

That is how supply and demand normally works...

Really? So if you put your house on the market and only 1 person is interested you’d expect to sell it for more than in the scenario where 6 people are clamoring to buy it ..?

[Pink Mist]

30 minutes ago, nchuckle said:

So that’s two people not understanding the basic rule of supply and demand…. ????‍♂️ 

In essence you're correct, yet with the supply on hand and few demands the prices should drop. It is not like there is currently a high demand for the travel to the less popular places as I Indicated above.

 

https://www.investopedia.com/ask/answers/033115/how-does-law-supply-and-demand-affect-prices.asp#:~:text=It's a fundamental economic principle,services when demand is unchanged.

 

It's a fundamental economic principle that when supply exceeds demand for a good or service, prices fall. When demand exceeds supply, prices tend to rise. There is an inverse relationship between the supply and prices of goods and services when demand is unchanged.

 

 

[Pink Mist]

6 minutes ago, nchuckle said:

Really? So if you put your house on the market and only 1 person is interested you’d expect to sell it for more than in the scenario where 6 people are clamoring to buy it ..?

Is that not the way things are done in Thailand for restaurants selling items or even shops? Less customers and prices are usually jacked up to make up for losses.

 

I understand what your saying I really do and I agree that's how it works in the real world. Yet this article is about Thailand. Above I posted an investopedia article and link. Tell me how in principal that this is how things are done here on Thailand. It's the inverse here as I see it, but then that's my humble opinion.

[dinsdale]

34 minutes ago, Pink Mist said:

That is how supply and demand normally works...

I'm obviously not very good at economics. The way I'm seeing it is as demand has gone up so has the price. I always thought it was that with Friedman or moneterist economics when demand goes down prices go up and as demand increases prices reduce. I'm probally wrong. Last couple of times I took a domestic flight the plane was pretty much full. Prices now are similar if not more than when planes were 1/2 empty due to covid regulations.

[Blumpie]

Thaighland will save the worlds airline industry!!!  There is nothing they can't do.  

[ThailandRyan]

26 minutes ago, nchuckle said:

So that’s two people not understanding the basic rule of supply and demand…. ????‍♂️ 

Can you explain in general terms how supply and demand eally works in Thailand versus the rest of the world. Have you not seen the price increases when there is to much supply and low demand because of the prices. It seems to be a strange reversed way of thinking in the minds here.  If I had fewer customers and locations were not being flown to as they were not popular and I was loosing money, I would slash my prices to load up the plane, but not here prices have increased on many unpopular routes. The article points out to giving possible subsidies to the airlines, well why not subsidize the passengers with incentives and thus the need to subsidize the airlines would not be necessary.