Competition hot in Thailand-China air travel market

Competition hot in Thailand-China air travel market

The tight Thailand-China air travel market is making Thai AirAsia cautious about pushing into the Chinese market.
The tight Thailand-China air travel market is making Thai AirAsia cautious about pushing into the Chinese market.

Competition in the Thailand-China air travel market has intensified to the point where potential newcomers may have second thoughts before wading in.

Apart from Thai-registered airlines, Chinese carriers have joined the fray and heavily depressed yields -- the average fare paid per mile per passenger.

"Fare structures have changed dramatically over the past two years with very low yields," said Santisuk Klongchaiya, director of commercial at Thai AirAsia (TAA).

He said that the situation has slowed TAA's push into the Chinese market, as any such move would require caution and a clear business directive.

The last new China route, launched by TAA on May 27 last year, was its connection between Bangkok and Shantou, the ancestral home of Thais of Teochew descent.

TAA, Thailand's largest low-cost carrier, is one of the biggest operators in the Thailand-China segment, with 16 routes and 151 flights a week, all served by a fleet of Airbus 320 single-aisle jets.

Its affiliated long-haul airline, Thai AirAsia X (TAAX), also operate a daily service from Bangkok's Don Mueang airport to Shanghai, employing A330-300 widebody aircraft.

The Chinese cities being served by TAA include Xian, Chongging, Kunming, Wuhan, Changsha, Nanning, Macau, Hong Kong, Shenzhen, Guangzhou, Nangchang, Hangzhou and Shantou.

TAA has carried more than 35 million passengers to and from China over the past decade.

Thailand is a top destination for Chinese travellers, while China has been the largest market for Thai tourism since 2012, fuelling air traffic between the two countries.

Last year 8.8 million Chinese came to Thailand while 9.8 million are projected to come this year -- about a third of total international arrivals.

TAA plans to launch two new China-bound routes later this year.

The regular flights are expected to be launched from a TAA base other than Don Mueang, with Mr Santisuk hinting at Chiang Mai.

Towards the end of the third quarter, TAA aims to launch two new routes to India, boosting its footprint there, which now covers Bengaluru, Chennai, Kolkata and Kochi.

Mr Santisuk declined to name the additional Indian cities, but said the delivery of more A320 jets to TAA's fleet later this year will enable the airline to cover more destinations.

This year, TAA aims to carry 19.5 million passengers, up from an estimated 17 million in 2016, and sustain an average load factor of 84%.

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