Irline Ticket Sales Descend As Costs Rise

[george]

Airline ticket sales descend as costs rise

Uncertainty over new airport also a factor

BANGKOK: -- Sales of airline tickets in Thailand this year are expected to grow more slowly than in 2005, to about 39 billion baht, reflecting higher air travel costs inflated by higher fuel prices.

The uncertainty over the opening of Suvarnabhumi Airport is also seen as holding back ticket sales growth as carriers are unable to make precise plans for increased flight frequencies or additional routes into and out of Bangkok.

Ticket sales in Thailand through the International Air Transport Association (IATA), which represents 270 airlines, last year rose 8% to 37 billion baht, missing the targeted 12% growth rate.

The sale value represents net fares that agents paid to airlines but excludes payments to Thai Airways International for domestic flights and local low-cost carriers whose systems are in the IATA.

Outbound tickets constitute about 80% of sales as recorded by IATA.

Chitvee Leelasiri, Thailand manager for IATA, said sales of long-haul tickets last year were slower than 2004, and that the growth came mainly from tickets for regional flights by IATA members.

Higher fuel prices and increased fares could hinder the growth in air ticket sales in Thailand, he said, adding the net air fares could rise by 5-10% this year as airlines move to cover increased costs.

Last October, THAI boosted the net fare by 3% for its regional flights and by 5% for intercontinental services.

Meanwhile, aviation executives said the delay in the opening of Suvarnabhumi airport, now tentatively targeted in June, has prevented them from accurately planning their capacities to Bangkok.

Several carriers have wanted to raise frequencies to Bangkok, flying bigger aircraft and introducing new routes. Because the existing Don Muang airport is already congested, they say, opportunities are being lost to bring in more tourists.

The surge in global passenger traffic in the world over the past two years _ after slumps from 2001 to 2003 because of events such as 9/11, Sars and bird flu _ is now slowing sharply.

IATA estimated that passenger growth in 2005 would be around 7.8%, compared with 15.6% in 2004. In 2006, it said, the figure was likely to drop further to a more sustainable 5.7% growth.

The year 2005 would represent the fifth consecutive year that the global airline sector has posted huge losses, now totalling billion for the period.

Fuel price rises had more than offset efficiency gains and rising revenues.

Losses in the troubled US airline sector for 2005 were set to deepen to billion versus .1 billion in 2004. European airlines were set to make .3 billion profits this year and Asian carriers .5 billion.

In 2007 airlines that belong to IATA, accounting for 95% of all international passenger and cargo traffic, could return a collective profit of over billion, the first time they had collectively returned positive figures since 2000.

But IATA said it would only be possible if the price of oil in 2007 stabilised to an average of per barrel.

--Bangkok Post 2006-01-17