Thailand’s airlines resist price war despite rising operational costs

[webfact]

 

Despite escalating operational costs, Thailand’s airlines are unlikely to trigger a new price war, while the Civil Aviation Authority of Thailand (CAAT) intends to retain the existing ceiling for ticket prices. This information was shared by Suttipong Kongpool, the CAAT director, during a seminar co-hosted by the Airlines Association of Thailand (AAT) and CAAT this week.

 

Suttipong indicated that with jet fuel prices, a significant component accounting for 30-40% of operational costs, not expected to rise beyond US$120 per barrel in the near term, the regulated ceiling price would remain unchanged for at least three years.

 

As per CAAT rules, the upper limit for low-cost airfares is set at 9.4 baht (US$ 0.27) per kilometre, while full-service airfares are capped at 13.0 baht (US$ 0.37) per km. Suttipong noted that despite the pandemic-induced spike in fuel prices to US$170-180, the price ceiling remained unaltered. CAAT does not intend to establish a minimum price, as lower airfares would be advantageous to passengers, specifically those who secure their tickets ahead of time.

 

Suttipong suggested that the possibility of airlines engaging in a price war, as experienced in 2019, is low, considering the inappropriate revenue levels that resulted from the large passenger volume. He stressed that a price war would be detrimental to airlines and the aviation ecosystem, especially in the wake of the pandemic’s impact, reported Bangkok Post.

Releasing booking data at the seminar for a flight scheduled from Bangkok’s Don Mueang airport to Phuket on May 19, 2023, CAAT revealed that 32.8% of passengers paid less than 1,000 baht (US$ 28), while 37.9% paid between 1,001 and 1,500 baht (US$ 28 and 43).

 

by Alex Morgan

Picture courtesy of Thairath

 

Full story: The Thaiger 2023-09-16

 

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[4MyEgo]

That's hilarious, wouldn't be a bad idea for a certain airline, no names mentioned (AA) to refund me my money for 4 tickets from a year ago after cancelling my flight.

 

[Xonax]

59 minutes ago, 4MyEgo said:

That's hilarious, wouldn't be a bad idea for a certain airline, no names mentioned (AA) to refund me my money for 4 tickets from a year ago after cancelling my flight.

 

Ditto. Our flight to Phuket was cancelled back in 2021, so we received a credit valid for 730 days. When we used the credit in March 2023, the flight to Phuket was again cancelled, so we now got a new credit to be used in the future (maybe??).

[MrMojoRisin]

Resist?

 

What exactly would be the urge to cut costs whilst expenses rise?

 

A race to bankruptcy?

 

Seems to me the only thing that needs resisting is the urge to raise prices.

[impulse]

13 minutes ago, MrMojoRisin said:

Resist?

 

What exactly would be the urge to cut costs whilst expenses rise?

 

A race to bankruptcy?

 

Seems to me the only thing that needs resisting is the urge to raise prices.

Volume...

 

Sure, they lose some money on each and every ticket, but they make it up in volume.

 

 

[WHansen]

24 minutes ago, impulse said:

Volume...

 

Sure, they lose some money on each and every ticket, but they make it up in volume.

 

 

Not the Thai way of thinking though.....

10 high priced sales giving say 1000 baht profit per sale sounds better than 100 sales giving 500 baht profit per sale.

Thai math ????

[impulse]

3 minutes ago, WHansen said:

Not the Thai way of thinking though.....

10 high priced sales giving say 1000 baht profit per sale sounds better than 100 sales giving 500 baht profit per sale.

Thai math

I always love the guys who run down Thai thinking. 

 

If you put a Thai guy, an Indian guy and a western guy in a room with just one $100 bill, I don't know which will end up with the money  But I know who won't.  The western guy.

 

[Andrew65]

I'm looking at a flight London - Bangkok rtn in February '24. The last time I looked Thai Airways were wanting about £200 more than Eva Air (Taiwanese) for the same direct flight, and Eva are probably a nicer airline.

[hotchilli]

8 minutes ago, impulse said:

I always love the guys who run down Thai thinking. 

 

If you put a Thai guy, an Indian guy and a western guy in a room with just one $100 bill, I don't know which will end up with the money  But I know who won't.  The western guy.

 

That's because the western guy isn't going to bother over $100

[Sydebolle]

Except Thai Lion all other carriers owe me money which is ........ under process ???? 

[joecoolfrog]

36 minutes ago, Andrew65 said:

I'm looking at a flight London - Bangkok rtn in February '24. The last time I looked Thai Airways were wanting about £200 more than Eva Air (Taiwanese) for the same direct flight, and Eva are probably a nicer airline.

EVA are consistently cheaper than Thai and definitely a better option.

[Chongalulu]

33 minutes ago, Andrew65 said:

I'm looking at a flight London - Bangkok rtn in February '24. The last time I looked Thai Airways were wanting about £200 more than Eva Air (Taiwanese) for the same direct flight, and Eva are probably a nicer airline.

Just completed my return leg with Eva. Can confirm not only was it the most competitive and direct flight too,the aircraft was modern AND the baggage allowance was TWO X 23 kg checked bags even in economy which I took full advantage of to bring a load of stuff that's expensive here.

[vivananahuahin]

3 hours ago, 4MyEgo said:

That's hilarious, wouldn't be a bad idea for a certain airline, no names mentioned (AA) to refund me my money for 4 tickets from a year ago after cancelling my flight.

 

I have the same problem, also more of year busy with my 

[Funkymover]

1 hour ago, impulse said:

I always love the guys who run down Thai thinking. 

 

If you put a Thai guy, an Indian guy and a western guy in a room with just one $100 bill, I don't know which will end up with the money  But I know who won't.  The western guy.

 

I always love the western  guys who loves to think they are so thai, that they  run down the western thinkers 

[vivananahuahin]

3 hours ago, 4MyEgo said:

That's hilarious, wouldn't be a bad idea for a certain airline, no names mentioned (AA) to refund me my money for 4 tickets from a year ago after cancelling my flight.

 

I will contact the Cabinet of the Transport Ministry to claim, i am a heart patient and cannot flight anymore, they received a medical certificate, the bank process was busy and after 1 month u turn, not able to pay back they give me 3 months credit account, no way i go further.

[khunPer]

4 hours ago, webfact said:

As per CAAT rules, the upper limit for low-cost airfares is set at 9.4 baht (US$ 0.27) per kilometre, while full-service airfares are capped at 13.0 baht (US$ 0.37) per km.

So with approximately 500 kilometers from Suvarnabhumi to Samui this makes Bangkok Airways' ticket price almost cheap; i.e., 500 x 13.0 baht = 6,500 baht...

[impulse]

10 minutes ago, Funkymover said:

I always love the western  guys who loves to think they are so thai, that they  run down the western thinkers 

I don't claim, nor aspire to be Thai.  But I worked with several dozen who were extremely competent.

 

I'd give a Thai a much better chance of succeeding in a western company than I'd give a westerner to succeed in a Thai company.

 

Edit:  You know how to get an extremely competent Thai to come work for your company?  You offer them 1/4 of what you'd have to pay a marginally competent westerner to fill the same role.  Instead of 1/8, like most western companies seem to try...

 

 

[DjSilver]

Thai airways will go bankruptcy again. They have higher prices than let's say Qatar Airwats, Emirates and Etihad. However, their service and quality isn't even close to half. This is why most people doesn't want to pay overpriced for less. And Thai Airways are managed by Thais, so no wonder it goes bad. Thai business is never successful in the long run, since Thais only see fast money now.

[retarius]

19 hours ago, MrMojoRisin said:

Resist?

 

What exactly would be the urge to cut costs whilst expenses rise?

 

A race to bankruptcy?

 

Seems to me the only thing that needs resisting is the urge to raise prices.

It is get more passengers to fill the planes and get increased revenue. It can work, but other airlines soon cut their prices and you can end up worse off.

[edwinchester]

18 hours ago, vivananahuahin said:

I will contact the Cabinet of the Transport Ministry to claim, i am a heart patient and cannot flight anymore, they received a medical certificate, the bank process was busy and after 1 month u turn, not able to pay back they give me 3 months credit account, no way i go further.

Try contacting the Thai Office of Consumer Protection, they maybe able to help you with a refund.

[josephbloggs]

19 hours ago, DjSilver said:

Thai business is never successful in the long run, since Thais only see fast money now.

What an idiotic comment.

[josephbloggs]

21 hours ago, khunPer said:

So with approximately 500 kilometers from Suvarnabhumi to Samui this makes Bangkok Airways' ticket price almost cheap; i.e., 500 x 13.0 baht = 6,500 baht...

Funny, as soon as I read the article I did the same thing. Wondering why my flight next week cost me 10,800 baht. But you made the same mistake as I did - that is one way. 1,000 x 13 baht = 13,000 baht return. So they are well within the cap.

[ericthai]

On 9/16/2023 at 2:23 AM, impulse said:

Volume...

 

Sure, they lose some money on each and every ticket, but they make it up in volume.

 

 

If you're loosing money on each ticket sold you still loose, as volume doesn't matter if it's a loss. 

Now, if they only make a little each ticket then yes volume is a factor. 

[Trip Hop]

On 9/16/2023 at 11:37 AM, DjSilver said:

Thai airways will go bankruptcy again. They have higher prices than let's say Qatar Airwats, Emirates and Etihad. However, their service and quality isn't even close to half. This is why most people doesn't want to pay overpriced for less. And Thai Airways are managed by Thais, so no wonder it goes bad. Thai business is never successful in the long run, since Thais only see fast money now.

Not my personal experience from my last 2 trips in April and August.  Qatar was £200 more expensive for a one-stop with not exactly great transit times when compared to a direct with Thai but most probably due to them sharing with BA?  Both Emirates and Etihad were roughly the same price or marginally under Thai but again with not exactly great transit times and the Emirates flight took off from Heathrow and returned to Gatwick. ????  

[Andrew65]

On 9/16/2023 at 11:37 AM, DjSilver said:

Thai airways will go bankruptcy again. They have higher prices than let's say Qatar Airwats, Emirates and Etihad. However, their service and quality isn't even close to half. This is why most people doesn't want to pay overpriced for less. And Thai Airways are managed by Thais, so no wonder it goes bad. Thai business is never successful in the long run, since Thais only see fast money now.

Thai would've gone bust 20 years ago if they weren't government-backed.

[DjSilver]

On 9/17/2023 at 7:52 AM, josephbloggs said:

What an idiotic comment.

I knoe, the truth hurts in Thailand ????

[DjSilver]

15 hours ago, Trip Hop said:

Not my personal experience from my last 2 trips in April and August.  Qatar was £200 more expensive for a one-stop with not exactly great transit times when compared to a direct with Thai but most probably due to them sharing with BA?  Both Emirates and Etihad were roughly the same price or marginally under Thai but again with not exactly great transit times and the Emirates flight took off from Heathrow and returned to Gatwick. ????  

If it's 3 hours transit time, that is great. One only have to stay at the lounge eating, drunking, relaxing and having a shower. I always try to find transit time with around 3-4 hours when traveling with my 5 year old daughter.

[khunPer]

On 9/17/2023 at 7:53 AM, josephbloggs said:

On 9/16/2023 at 10:25 AM, khunPer said:

So with approximately 500 kilometers from Suvarnabhumi to Samui this makes Bangkok Airways' ticket price almost cheap; i.e., 500 x 13.0 baht = 6,500 baht...

Funny, as soon as I read the article I did the same thing. Wondering why my flight next week cost me 10,800 baht. But you made the same mistake as I did - that is one way. 1,000 x 13 baht = 13,000 baht return. So they are well within the cap.

No, I didn't make any mistake, 500 kilometers "from Suvarnabhumi to Samui" is the one way stretch from Bangkok to Samui. A one way ticket with Bangkok Airways is in the level of 5,000 baht, depending of departure time; early morning bird is still cheaper...

[747man]

On 9/16/2023 at 2:00 PM, Andrew65 said:

I'm looking at a flight London - Bangkok rtn in February '24. The last time I looked Thai Airways were wanting about £200 more than Eva Air (Taiwanese) for the same direct flight, and Eva are probably a nicer airline.

Just Book EVA M8......

 

[747man]

On 9/16/2023 at 2:38 PM, nchuckle said:

Just completed my return leg with Eva. Can confirm not only was it the most competitive and direct flight too,the aircraft was modern AND the baggage allowance was TWO X 23 kg checked bags even in economy which I took full advantage of to bring a load of stuff that's expensive here.

That's a Hell of a lot of OXO Cubes M8