Airlines intensify promotions to seize domestic demand

Airlines intensify promotions to seize domestic demand

Airlines are intensifying sales promotions to seize limited domestic demand and provide some hope for long-term investment in new aviation hubs.

Bangkok Airways president Puttipong Prasarttong-Osoth said the airline has to offer promotions or value-for-money prices which can be used in tandem with tourism stimulus campaigns from the government to boost domestic demand.

"We do not expect prices to stay at this rate which are about 10% higher than low-cost carriers, but are normally 15-20% higher," Mr Puttipong said.

Recently, low-cost airlines began offering buffet-style tickets to increase cash flow. As a full-service airline, Bangkok Airways is not able to provide unlimited offers, but it will now introduce a similar promotion model featuring a bundle of tickets with a single purchase.

Mr Puttipong said the airline is also seeking a 4-billion-baht loan from financial institutions to stay afloat, while waiting for aid from the government.

Bangkok Airways currently operates seven routes including Bangkok, Chiang Mai, Lampang, Phuket, Koh Samui, Sukhothai and Trat, but with less frequent flights.

He said the airline will resume international flights to Cambodia, Laos, Myanmar and Vietnam, Singapore and Hong Kong once the borders of these countries reopen.

However, the airline cancelled its plan to add new aircraft to its fleet over the next two years after two aircraft ended their lease terms in 2020-2021. Another six aircraft lease terms will expire next year.

Next year, the fleet will be reduced to 30, down from 38 in 2019, but this would still be sufficient to serve moderate demand.

As Bangkok Airways is one of the BBS consortium members which won a bid to build the Eastern Airport City Project at U-tapao, Mr Puttipong said the project is proceeding with the same timeline and the group will submit a master plan by mid-year.

The airport terminal in the first phase will have an annual capacity of 15 million passengers and is scheduled for construction in the first quarter of 2022.

Meanwhile Santisuk Klongchaiya, chief executive of Thai AirAsia (TAA), said it aims to increase revenue from its Suvarnabhumi hub to 20% this year from the current 10% and the ratio will rise to 25-30% by 2022.

TAA, which has a twin hub in Bangkok via Don Mueang and Suvarnabhumi airports, plans to add flight frequencies from Suvarnabhumi to five domestic routes -- Chiang Mai, Phuket, Nan, Nakhon Si Thammarat and Hat Yai.

TAA is studying the possibility of introducing new routes from Suvarnabhumi to Surat Thani, Ubon Ratchathani, Udon Thani and Khon Kaen as the airport has only one other budget player apart from TAA, providing room for TAA's expansion.

The airline also plans to launch a domestic connecting service to facilitate passengers who have to transfer in Bangkok.

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