'Buffet' raises flight funds

'Buffet' raises flight funds

Low-cost carriers hit on domestic lure

Domestic passengers queue at TVJ's check-in counter at Suvarnabhumi airport. (Photo by Dusida Worrachaddejchai)
Domestic passengers queue at TVJ's check-in counter at Suvarnabhumi airport. (Photo by Dusida Worrachaddejchai)

Low-cost carriers are gearing up for more intense competition by offering buffet-style tickets to boost short-term liquidity, in line with the upcoming stimulus from the government.

Bundle tickets are on offer from Thai VietJet (TVJ) and Thai AirAsia (TAA) during the first quarter, while Thai Lion Air is considering this option as the government is poised to subsidise these tickets in the near future.

TAA chief executive Santisuk Klongchaiya said the airline aims to sell 80,000 unlimited passes during a six-day sale period this week, after the first edition saw 86,500 passes sold, generating 260 million baht in revenue.

The target revenue from the second sale is 288 million baht as the price per unit is higher -- up from almost 3,000 baht to 3,600 baht per pass.

According to TAA records, there were 740,000 seats redeemed from the first project, while the average number of seat booking per person was eight during the five months from July to December 2020. The maximum usage peaked at 164 seats, which means individual passengers took 3-4 trips per week.

TAA put limitations on available seats for this type of ticket on each flight at 20%, while passengers have to book 14 days in advance, decreasing from 21 days in the first edition.

Cash-strapped TAA reported a net loss of 1.11 billion in the fourth quarter last year as the second wave of outbreaks and travel restrictions crushed travel sentiment in December and continued to ravage the industry in the first two months of this year.

Anantachai Wannaphan, marketing manager at TVJ, said the airline is planning to launch the second edition of unlimited passes in April to preserve travel sentiment in the post-Songkran period.

"Other airlines may eye this strategy to increase cash flow, but we'd rather call it a new opportunity as we conducted a feasibility study before launching the first campaign in January," he said.

"Business travellers or those who have to visit their hometowns frequently are our main target."

Mr Anantachai said TVJ will hold the price of its pass at 12,000 baht, which is three times its competitors' prices, but buyers accept this price level as the airline compensates with flexible features such as allowing bookings three hours prior to flight time and has no limits on this type of ticket on each flight.

"We would like to maintain momentum after Songkran ends in April. The second edition of unlimited passes will help people keep travelling," said Mr Anantachai.

The Tourism Authority of Thailand governor Yuthasak Supasorn said the subsidy on buffet passes should be included in the "We travel together" campaign, which still has 7-8 billion baht in funds remaining.

"In principle, the buffet tickets are eligible for this campaign, but the same conditions are applied, such as travel destinations should match hotel bookings, while the subsidy is capped at 2,000 baht or no greater than 40% of actual costs," said Mr Yuthasak.

He said both the airfare subsidy and new allotments of hotel subsidy in the next phase might be endorsed by the cabinet within this month to help stimulate the stagnant domestic market.

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