Thai AirAsia opposes airfare reductions due to operational costs

[webfact]

 

Thai AirAsia has weighed in on the issue of high airfares which prompted calls for price reductions, arguing that slashing ceiling prices is not a feasible solution due to increased operational costs borne by airlines since the onset of the pandemic.

 

The airline’s Chief Executive, Santisuk Klongchaiya, has suggested increasing flights during the Songkran festival as a potential strategy to decrease average fares.

 

Santisuk explained that costs of operation, including fuel and maintenance, have surged since the pandemic hit. Furthermore, the aircraft supply chain has yet to recover to its pre-pandemic state. He stated that it’s typical for airfares to increase during the Songkran holiday due to high demand. The Civil Aviation Authority of Thailand (CAAT) regulates these airfares, setting ceiling prices for each route.

Thai AirAsia plans to keep prices reasonable, adjusting them based on each route’s seasonality and passenger demand. As a response to CAAT’s policy, the airline proposes to add more late-night and early-morning flights to help lower average fares.

Santisuk argued against the implementation of a minimum price for airlines, citing that such a measure contradicts free market principles and could negatively affect consumer benefits from airlines’ promotions.

 

The Thai AirAsia CEO also stated that Thai carriers would not revert to price wars as past experiences have proven this to not yield positive operational results. He suggested that the government could assist in reducing passenger costs by adjusting the jet fuel tax rate.

 

Setting standard prices

 

On the same note, Tansita Akrarittipirom, director of commercial operations at Thai AirAsia, highlighted the necessity for low-fare promotions in the Thai market. She noted that the majority of the public does not have high disposable income, but travel remains a desired activity.

 

Thai AirAsia has set a target of 15 to 20% revenue growth this year, aiming to expand its fleet to 60 aircraft with a seat capacity of 23.3 million. The airline has plans to add three A321neo and one A320ceo jets to its fleet, with the intention to operate 33 domestic and 58 international routes to 18 countries this year, reported Bangkok Post.

 

Sarun Benjanirat, deputy director-general of CAAT, mentioned that the agency is considering a new ceiling price that will accommodate all airlines. The price will be set for each route and adjusted based on each airline’s services. Factors such as fluctuating fuel price are to be considered in setting an appropriate rate. The implementation of these new rules is expected in the second or third quarter of this year.

 

by Puntid Tantivangphaisal

Photo courtesy of Bangkok Post

 

Source: The Thaiger 2024-03-09

 

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[Tropicalevo]

If the government wants air fares to be lower, it should subsidise them. Not tell airlines what their pricing policy will be.

The travellers will decide if an airline is too expensive or not.

[bamnutsak]

This dose of reality will not go over well with the public or government officials.

 

 

[Dolf]

Prices are cheap mostly if you book 2 months ahead

[Dolf]

1200 baht CM to Don Muang in April. That's not expensive.

 

 

[Dolf]

Some of these vip buses charge 700 or 800 baht and take 10 to 12 hours versus 1200 baht for a plane ticket.

[WHansen]

31 minutes ago, Tropicalevo said:

If the government wants air fares to be lower, it should subsidise them. Not tell airlines what their pricing policy will be.

The travellers will decide if an airline is too expensive or not.

It is an attempt to halt price gouging across the board. If every airline price gouges, the travellers have no choice on wether an airline is too expensive to use.

 

Thai AirAsia opposes airfare reductions due to greed should have been the headline.

[dinsdale]

1 hour ago, webfact said:

Thai AirAsia plans to keep prices reasonable,

So that's 30-40% higher for the route I take. Costs have gone up that much for AirAsia or could it be that price gouging is indeed occurring?

[dinsdale]

55 minutes ago, Dolf said:

Some of these vip buses charge 700 or 800 baht and take 10 to 12 hours versus 1200 baht for a plane ticket.

Bt1200 that was Bt800 is the point.

[dinsdale]

1 hour ago, Dolf said:

Prices are cheap mostly if you book 2 months ahead

No. Not the case. Prices are well up even with very early booking.

[dinsdale]

1 hour ago, Tropicalevo said:

If the government wants air fares to be lower, it should subsidise them. Not tell airlines what their pricing policy will be.

The travellers will decide if an airline is too expensive or not.

How's that then if all airlines are guilty of price gouging.

[Dolf]

40 minutes ago, dinsdale said:

Bt1200 that was Bt800 is the point.

Ive never seen 800 baht fares on that route

[Robert Paulson]

Government needs to get out of the airline industry completely. Get rid of the tsa. Our flights would be easier and the costs would drop dramatically.

 

i got a promotional 1 baht flight to phuket once and I seriously could not believe how much the taxes and fees were. I can’t remember the exact cost but I think it was about 40 bucks, for a free flight! 

[dinsdale]

23 minutes ago, Dolf said:

Ive never seen 800 baht fares on that route

Never flown BKK to CNX but as stated above I do know that fairs have gone UP on the route I fly. Pre covid cheapest was around Bt750. Now the cheapest is around Bt1050 going up to almost Bt1900. The cheapest now is around a 40% increase from pre covid and even during covid if I'm guessing right. That's a big increase in anyone's books.

Edited March 9 by dinsdale

[Dolf]

1 minute ago, dinsdale said:

Never flown BKK to CNX but as stated above I do know that fairs have gone UP on the route I fly. Pre covid cheapest was around Bt750. Now the cheapest is around Bt1050 going up to almost bt1900. The cheapest is around 40% increase from pre covid and even during covid if I'm guessing right.

Fuel prices have gone up, airport fees have gone up

[dinsdale]

1 minute ago, Dolf said:

Fuel prices have gone up, airport fees have gone up

40%?

[dinsdale]

2 hours ago, webfact said:

On the same note, Tansita Akrarittipirom, director of commercial operations at Thai AirAsia, highlighted the necessity for low-fare promotions in the Thai market.

I remember one of these promotions not so long ago. 12% discount. Thing is the put the price up 12% and then discounted that price by 12%. 0% savings from the previous day's fare.

[Dolf]

6 minutes ago, dinsdale said:

40%?

March is high season high demand. Fuel went up a lot.

[dinsdale]

Just now, Dolf said:

March is high season high demand. Fuel went up a lot.

Prices have been up in all seasons and on all routes not just high season tourist destinations. Up at least 40% since the end of covid. 

[Dolf]

Just now, dinsdale said:

Prices have been up in all seasons and on all routes not just high season tourist destinations. Up at least 40% since the end of covid. 

Not true. I paid the same prices in 2019.

[Dolf]

Nok Air 884 baht for April DM to Udon

 

How is that not cheap?

[dinsdale]

7 minutes ago, Dolf said:

Nok Air 884 baht for April DM to Udon

 

How is that not cheap?

Early morning flight would be my guess. Later in the day and I'll bet it's up around the 1200 mark.

Edited March 9 by dinsdale

[Dolf]

3 minutes ago, dinsdale said:

Early morning flight would be my guess. 

3 flights same day, same price. 6am, noon and night.

[dinsdale]

Just now, Dolf said:

3 flights same day, same price. 6am, noon and night.

Then yes that's ok.

[Jonathan Swift]

2 hours ago, Tropicalevo said:

If the government wants air fares to be lower, it should subsidise them. Not tell airlines what their pricing policy will be.

The travellers will decide if an airline is too expensive or not.

Common sense that. Thank you. 

[alex8912]

43 minutes ago, dinsdale said:

Never flown BKK to CNX but as stated above I do know that fairs have gone UP on the route I fly. Pre covid cheapest was around Bt750. Now the cheapest is around Bt1050 going up to almost Bt1900. The cheapest now is around a 40% increase from pre covid and even during covid if I'm guessing right. That's a big increase in anyone's books.

$10. I'd get over it. Did you complain about how low the fares were before?  Because they were. 

[Jonathan Swift]

I Sued Thai Air Asia last year, through priceline (whose office, Booking Holdings,  is right near my house in the US) because they refused to refund my $165 ticket after they rescheduled my flight. Cost priceline $1000 US to settle with me. I also posted it all over facebook. So for messing with me over petty cash they lost 8 x what they could have gotten off with, plus after my review was posted very likely lost a few hundred paying customers at least. I can tell you first hand that the airline is run by and staffed with idiots. And so is priceline and their entire group of agoda, expedia, and booking dot com. And with every story like this the airline loses a hundred or more customers. So what will they do, raise prices to cover THOSE losses? And so it goes. 

Edited March 9 by Jonathan Swift

[Jackbenimble]

3 hours ago, Tropicalevo said:

If the government wants air fares to be lower, it should subsidise them. Not tell airlines what their pricing policy will be.

The travellers will decide if an airline is too expensive or not.

correct, market forces determine whether someting is overpriced. People will vote with their feet. These airlines need to invest in training the staff properly too so that they dont need 2-3 people to do a job that 1 person can do and pay a proper wage. 

Fuel tax and airport tax needs to be looked at but these airlines need to look inwardly too at their own operational costs and trim the fat off.  

[JGV]

Empty planes isn't a solution

[Jackbenimble]

11 minutes ago, Jonathan Swift said:

I Sued Thai Air Asia last year, through priceline (whose office, Booking Holdings,  is right near my house in the US) because they refused to refund my $165 ticket after they rescheduled my flight. Cost priceline $1000 US to settle with me. I also posted it all over facebook. So for messing with me over petty cash they lost 8 x what they could have gotten off with, plus after my review was posted very likely lost a few hundred paying customers at least. I can tell you first hand that the airline is run by and staffed with idiots. And so is priceline and their entire group of agoda, expedia, and booking dot com. And with every story like this the airline loses a hundred or more customers. So what will they do, raise prices to cover THOSE losses? And so it goes. 

your bitterness from your own experience is clouding your judgement I think. These airlines would not even exist if they were run by idiots, that comment alone says more about you than it does about the people who run the airlines. The staff are not idiots either, they are just different to what you might be used to in the USA but so are a lot of things in S.E.Asia. being different doesn't make something wrong. Lots of things are done "differently" here and it's easy to refer to them as stupid, but it is also innacurate. They just think differently. 

Edited March 9 by Jackbenimble