Budget airlines will wither: Aerothai
Grim prospects for local aviation even as neighbours boom
Tough competition in the low-cost aviation business and overcrowded airports in Thailand will cause many budget airlines to die out, says the Aeronautical Radio of Thailand (Aerothai).
This dim prospect is likely to occur in the next five years, with the local aviation industry likely to contract as a result, said Somnuk Rongthong, president of Aerothai.
The downturn is the outcome of inert market conditions and the country's lack of facilities to serve aircraft.
The market will become saturated because the country's two key airports -- Don Mueang and Suvarnabhumi -- are overcrowded and unable to accommodate more operators.
That will prompt budget airlines to move their base and flights upcountry such as to the northeastern region where the aviation business is growing.
Yet these low-cost services and passengers will encounter inconvenience because many provincial airports do not have enough parking bays for planes, Mr Somnuk said.
On average, one airport has only three to four bays, enough to manage just a few flights per hour.
This situation will be further intensified as fierce competition forces by low cost airlines to cut prices to gain more market share. "It will become so severe that some airlines will wither and eventually shut down," Mr Somnuk said.
While the local market is slackening, those of neighbouring countries are performing better.
Vietnam and Myanmar, with a total population of 140 million people, are popular destinations among the group of CLMV countries (Cambodia, Laos, Myanmar and Vietnam).
An increase in demand in these countries usually results from improved economic conditions. "When people have more money, they tend to travel," Mr Somnuk said, referring to an increase of fights from Vietnam and Myanmar to Europe.
Laos also has bright prospects in its aviation market, with a plan to upgrade its Vientiane airport to handle 200 flights daily from 100 flights per day, said Amdounla Salinthone, director of Air Traffic Services Division of Lao Air Navigation Services. "The number of flights in our market is growing at 10% on yearly average," he said.
Trips between his country and China make up 30% of flights, or 131,000 flights a year, with around 3,000 flights between Laos and Thailand, he added.
"We need to expand airports and build new ones to increase supply to satisfy higher regional demand," Mr Somnuk said.
This will enable Thailand to boost its aviation growth.