Suvarnabhumi Airport To Reduce Landing Fee For More Passengers

[webfact]

Suvarnabhumi Airport to reduce landing fee for more passengers

BANGKOK: -- (NNT) – The Airport of Thailand Plc (AoT) has launched a new measure to attract airlines to fly to Thailand's Suvarnabhumi International Airport in exchange for landing fee reductions in 2011.

Suvarnabhumi Airport Director, Niran Thiranartsin, stated that the AoT, on Thursday, signed a Memorandum of Understanding with 10 airlines to reduce the landing fee for all aircrafts of the 10 airlines with international passengers landing at Suvarnabhumi Airport.

The ten airlines signing the MoU have the highest amount of passengers using Suvarnabhumi Airport.

Mr Niran explained further that the measure could boost AoT's revenue in terms of collecting passenger service charges (PSC) from the increased amount of passengers.

He reasoned that the reduction of landing fees would persuade airlines to make marketing plans to increase the number of passengers.

At present, the PSC is charged at 700 THB per head.

The AoT gains about 70,000 THB in landing fees for each Boeing 747-400 landing at the airport. The total PSC collected per flight stands at around 350,000 THB. The maximum landing fee reduction is expected to be at 30%. The AoT also receives 15% of sales from shops operating in Suvarnabhumi Airport.

The airport director stated that more passengers coming to the country would benefit the national economy. He expected that all 86 airlines landing at Suvarnabhumi airport would participate in this project because it was free of charge.

-- NNT 2010-02-20

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[rfukata]

reducing landing fee's will benefit the airlines bottom line and not necessarily benefit the passengers.

do you think the airline(s) will pass on credit to each ticketed revenue destin for Thailand? NO.

This will create more administrational procedures costing the airline more rather than offering discount per ticket

[givenall]

The important thing is that may be finally Thai companies understand the relationship between the price and consumption and law of demand. Over here it seem when the demand drops the price go up so they can make losses by higher prices.

[Searat7]

I have seen nothing lately about expansion plans for a third runway and more terminal space. If AOT wants to increase the number of passengers they should have a firm plan in space for expansion of airport facilities.

[lomatopo]

What they should probably do is link the reduction in landing fees to actual additional flights, perhaps they are doing this? So when say LH decides to use BKK instead of SIN to tag flights to SGN/JKT etc. then offer them the discount on both the additional arr/dep and all currently in use. Just offering a discount on existing captive business does nothing to increase, or capture incremental, revenue. For airlines to add new routes or change stop-over points requires a lot of additional cost, not always off-set by the reduced landing fees. Then once airlines decide to switch, the the current airport operating authority sometimes matches the incentive to stay.