AirAsia touts Bangkok hub to Srettha

AirAsia touts Bangkok hub to Srettha

AirAsia executives led by Mr Fernandes, fifth from left, are pictured at a meeting with Mr Srettha.
AirAsia executives led by Mr Fernandes, fifth from left, are pictured at a meeting with Mr Srettha.

In talks with Prime Minister Srettha Thavisin, AirAsia insists it plans to make Bangkok an aviation hub similar to Dubai, while calling on the government to cut the excise tax as Thailand remains one of the few countries that still has this expense.

On Wednesday AirAsia executives met Mr Srettha for the first time as the aviation group agreed to submit proposals to the government within this week requesting measures to help elevate the tourism industry in Thailand, including a reduction in the excise tax on jet fuel by 40% for domestic routes.

Tony Fernandes, AirAsia founder and chief executive of Capital A, said while Malaysia and Indonesia never collect the excise tax on jet fuel, Thailand remains among the few countries that still mandate the collection of 4.726 baht per litre, while Vietnam collects a levy of 1.4 baht per litre.

He said with a firm order of 421 aircraft from Airbus, with 75% already financed, AirAsia Group has committed to stimulating the growth of tourism in Thailand and Southeast Asia through its robust network.

"It's time for Bangkok to be the Dubai of Asean, where 700 million passengers from this region can use the airport in Bangkok as a hub to travel to Europe, Africa and the Middle East," said Mr Fernandes.

He said the group hopes Airports of Thailand can develop its airport facilities and increase capacity or have a dedicated terminal for low-cost carriers, which could offer passengers a lower passenger fee than existing airports.

Mr Fernandes said the completion of the merger between its short-haul service AirAsia and long-haul AirAsia X is expected within this year, with its Malaysian units first.

The union of Thai AirAsia and Thai AirAsia X will be finalised once the latter exits its rehabilitation plan, he said.

Mr Fernandes said merging into a single airline would help to deal with congested slots at many airports as AirAsia has more flexibility to switch from single-aisle aircraft to wide-body jets, catering to routes with high demand without having to request more slots.

"Thailand remains the best-performing unit for our group based on recent sales data in January," he said.

Tassapon Bijleveld, executive chairman of Asia Aviation, the holding company of Thai AirAsia, said of the 421 aircraft in the order book, aviation units in Thailand would receive 100-150 jets.

He said the order includes a number of A321XLR jets, which can fly a longer range of up to 12 hours, extending from the normal range of four hours operated by the A320, the largest type in its existing fleet.

The greater aircraft efficiency will enable AirAsia X to fly to many cities in Europe, as well as Almaty in Kazakhstan, for which the airline is requesting permission, said Mr Tassapon.

Thai AirAsia has 57 jets in the fleet, but only 51 are operational, with the remainder waiting for maintenance. Thai AirAsia X has six active aircraft and expects to add at least four more jets to the fleet this year, he said.

Mr Tassapon said Thai AirAsia X anticipates exiting its rehabilitation plan by the end of next year after successfully negotiating a 70% haircut on debts.

"After merging into a single airline, we will continue to use two airports in Bangkok as our hubs," he said.

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