Thailand Grants Airasia Unit Eight-year Tax Break

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BANGKOK: Thailand has granted no-frills carrier Thai AirAsia investment privileges that include an eight-year tax break, the country’s Board of Investment said.

AirAsia, which plans to invest 1.12 billion baht (US$28.5mil) and hire 279 Thai staff, would also be exempt during the period from paying import tax on equipment, the board said in a faxed statement.

Thai AirAsia is a joint venture between Shin Corp, which is owned by Thai Prime Minister Thaksin Shinawatra’s family, and AirAsia Sdn Bhd.

Thai AirAsia’s service would contribute to expanding Thailand’s airline market and to developing the country’s tourism and economic activity, the board said.

Thailand, one of the biggest tourist destinations in Asia with about 10 million visitors annually, is set to face greater competition in the airline market.

Thai Airways International, the country’s biggest carrier, cut fares this month on most domestic routes by as much as 40% and is scheduled to announce next month plans to start its own low-cost unit.

Thai AirAsia said in a separate statement it would take delivery of its first plane on Thursday.

It plans to begin flights from Bangkok to three Thai domestic destinations. It also expects approval to begin flights between Bangkok and Singapore as early as March.

The three daily routes are from Bangkok to Chiang Mai, Phuket, and Hadyai, while flights to Khon Kaen in the northeast are to begin on Feb 12.

It offers an average discount of 20%-50% off comparative rates of other Thai domestic airlines. Some 20,000 of the 99-baht promotional tickets will be available for flights in February– Bloomberg