Thailand Launches Its First Budget Carrier

[george]

Thailand launches its first budget carrier - Thai Air Asia

BANGKOK, Thailand: Thailand's first no-frills airline - Thai Air Asia - has been launched.

It's a joint venture between the kingdom's largest telecommunications operator Shin Corp and Malaysia's Air Asia.

Thai Air Asia will fly to 4 destinations within the country from the third of next month.

Its promotional rates will go as low as US$2.50 for a one-way ticket from Bangkok to popular resort areas like Chiang Mai, Phuket and Hat Yai.

These promotions will go on throughout the year, at intervals.

And even normal fares, executives say, would be at least 20 percent lower than those offered by domestic competitors.

Operating costs are lowered through the use of online bookings, and ticketless travel.

According to an optimistic forecast, it'll break even within the first 10 months of operations.

Thailand's domestic aviation industry carries about 7 million passengers a year, and this figure is expected to grow to 8 million this year.

The carrier expects to target Thais who've never flown before.

National carrier Thai Airways is fighting back by lowering its fares for destinations within Thailand.

And it's entering the no-frills fray.

Analysts say the national carrier will be launching a low-cost airline of its own within the next few months.

Thai Air Asia says it's ready for the competition.

Said its CEO, Tassapon Bijleveld: "We (Thai Air Asia) will definitely face it. We have a target of one million domestic passengers to carry and we will definitely focus on our end, on our operation to carry one million passengers."

Thai Air Asia will also fly international routes, with Singapore's Changi Airport its first international destination.

The company says its first flight is to Singapore is expected to take off as early as late March.

Air Asia's Chief Executive, Tony Fernandes, had wanted his Malaysian arm to be given discounts for landing at Changi Airport.

When he didn't get them, he chose Johor's Senai Airport as his Malaysian destination in the South.

But he's going ahead with landing his Bangkok flights at Changi - despite not getting discounts.

"We'll take Singapore from Bangkok for the moment. We still think Johor Bahru is a great place and our main growth will be in JB cause that's a low-cost airport," he added.

Air Asia says Indonesia could be the next ASEAN country it ventures into.

--ChannelNewsAsia

[george]

Bt250 for airfares north, east and south

Thai AirAsia is offering 20,000 one-way tickets to Khon Kaen, Chiang Mai, Phuket and Hat Yai at a promotional launch fare of Bt99, excluding taxes and fees.

The fares, to promote the low-cost airline and its slogan "everyone can fly", will be offered to passengers who buy tickets before next Monday (Jan 19) for flights between February 3-29.

With taxes and fees of about Bt150-160 per flight, the total fare comes to about Bt250 during the promotional period.

Once the promotional tickets are sold, AirAsia's fares will return to "regular" prices, some 20-50 per cent lower than current average prices.

These are: Bangkok-Khon Kaen from Bt500 to Bt1,400; Bangkok-Chiang Mai from Bt600 to Bt1,800; Bangkok-Phuket from Bt800 to Bt1,900; and Bangkok-Hat Yai from Bt900 to Bt2,400.

Low-fare seats in each fight will constitute about 30-40 per cent of all seats.

Thai AirAsia chief executive Tassapon Bijleveld said the 20,000 promotional tickets would be allocated on all flights in February, depending on demand for seats on each flight.

"Bt99 is a very attractive fare and is a lucky number for Thai people, so if the company launches other new routes in the future, it will start with the promotional fare at Bt99 like the first four routes," he said.

Bookings can be made on its call centre at (02) 515 999. Travellers paying cash must do so within 48 hours after booking - at Krung Thai Bank's branches nationwide.

Travellers can also book at AirAsia's website www.airasia.com, AIS's customer service centres in Bangkok and surrounding areas, and at AirAsia's counter at Bangkok Airport.

Among other airlines, Thai Airways International recently launched promotional fares on 12 routes with tickets discounted 25-30 per cent off usual prices. Flights from Bangkok to Phitsanulok, Khon Kaen, Ubon Ratchathani and Udon Thani in the Northeast are selling for Bt1,199 - for a one-way ticket.

Tickets from Bangkok to Chiang Mai, Nakhon Si Thammarat and Surat Thani will be offered for Bt1,399 (one-way). And tickets from Bangkok to Chiang Rai, Hat Yai, Krabi, Phuket and Trang will go for of Bt1,599 (one-way).

This promotion began on December 29 and will continue until March.

PB Air's Diet Jet is also offering flights from Bangkok to Krabi for Bt555, excluding airport tax and administration charges, or a total price of about Bt900 for a one-way ticket. But the airline only dedicates 20 per cent of seats on its normal flights to these cheaper fares.

AirAsia is also planning flights from Bangkok to Singapore from the end of March or early April, with tickets priced at about Bt2,000 one-way. The company aims to launch another five or six international routes by the end of this year to countries in Asia, plus some provinces in China.

Thai AirAsia, jointly owned by telecom conglomerate Shin Corp, run by Prime Minister Thaksin Shinawatra's family, and Malaysia's Air Asia, has registered and paid-up capital of Bt400 million.

"We expect to break-event within eight to 10 months carrying at least one million passengers," said Tassapon.

Boonklee Plangsiri, the executive chairman of Shin Corp and chairman of Thai AirAsia's board, said AirAsia expected to earn revenue of more than Bt1 billion in its first year and increase the number of planes from its current two to 8-10 by the end of this year.

"Within the first one to two years of Thai AirAsia, we don't have any plan to bring the company to list on the stock market because we want to have more of a track record before jumping into the market," he said.

The budget airline market had more room to expand, he said. At present only 10 per cent of Thais travel by plane, meaning there is great potential to serve new customers.

Orient Thai managing director Udom Tantiprasongchai, meanwhile, said his airline anticipated huge new demand with up to 50 per cent of passengers likely to be newcomers to flying. "With the potential for higher demand for domestic flights, it will attract more players, possibly as many as 10 low-cost airlines," he said.

Orient Thai has four flights a day from Bangkok to Chiang Mai at a cost of Bt1,400 a trip. It will open new routes to Hat Yai and Chiang Rai next month, at a cost of Bt1,598 a trip (one way).

--The Nation 2004-01-14