Thai AirAsia (TAA) is breaking into the Bangkok-Siem Reap segment long dominated by Bangkok Airways in a move reflecting Cambodia's new directive to open up its top destination for mass tourism.
TAA chief executive Tassapon Bijleveld announces the launch of Bangkok-Siem Reap flights at its Don Mueang airport base.
Thailand's largest low-cost carrier is taking the market by storm by offering a promotional one-way fare of only 79 baht in a move that is likely to spark a price war on the route.
TAA secured permission from Cambodian authorities to launch a daily service starting on Oct 1 as Phnom Penh ended Bangkok Airways' monopoly of over 16 years.
TAA chief executive Tassapon Bijleveld on Monday said it took the airline five years to obtain permission as Cambodia realised that more flights would help its drive to raise foreign visitors to the 12th-century Angkor Wat, a Unesco world heritage site.
Siem Reap last year attracted 1.5 million foreign visitors, while Cambodia as a whole was visited by 3.5 million foreigners who contributed more than US$2 billion to its economy.
TAA will be the first budget carrier and third airline to operate the Bangkok-Siem Reap route.
Last November, Cambodia Angkor Air (CAA), a joint venture with Vietnam Airlines, launched a regular service on the route.
Mr Tassapon expects fierce price competition on the route to benefit consumers as TAA is keen to use low fares to ramp up traffic.
TAA is offering 8,000 seats with a promotional fare of 79 baht one way, excluding a fuel surcharge of 220 baht and airport tax of 700 baht.
Santisuk Klongchaiya, TAA's commercial director, said he was charged about 14,000 baht by Bangkok Airways for his recent round trip to Siem Reap.
An average non-promotional TAA fare on the route should not exceed 3,000 baht one way, about the same as CAA's fare, he said.
The main difference is that TAA's service is by jet, which takes only 45 minutes to reach Siem Reap, Mr Santisuk told the Bangkok Post.
Bangkok-Siem Reap has been a lucrative route for 45-year-old privately owned Bangkok Airways because most international tourists fly to the capital of the Khmer empire from Bangkok.
Mr Tassapon said the entry to Siem Reap forms part of TAA's Indochina plus Myanmar expansion plan before the formation of the Asean Economic Community.
"We've been on the lookout for new routes and saw Siem Reap as a destination that would enhance our network," he said in a media briefing yesterday.
TAA will use the single-aisle A320 with 180 seats for the Siem Reap service.
Bangkok Airways operates the ATR-72 turboprop and A319 jet with a frequency of 5-6 flights per day.
CAA operates a daily flight with the 67-seat ATR-72.
Speaking on the condition of anonymity, a Bangkok Airways insider said the airline is not overly concerned about TAA entering the Siem Reap sector, saying it caters to international passengers fed by code-share partner airlines such as Etihad and Air France. In addition, as a full-service airline, Bangkok Airways serves premium passengers while TAA aims at budget-conscious travellers.
Mr Tassapon is upbeat about traffic potential on the route, expecting to reach a load factor of as much as 80% within three months of the launch.