Expensive airfares remain a critical challenge for the tourism sector during the low season, as geopolitical conflicts affect fuel costs and flight capacity has yet to fully resume.
According to the Tourism Authority of Thailand (TAT), inbound seat capacity in the second quarter is expected to tally at least 10.7 million, up 19% year-on-year, but still lagging the 2019 level.
Siripakorn Cheawsamoot, deputy governor for Europe, Africa, the Middle East and the Americas at TAT, said the European market will continue to post growth during the second quarter with an estimated 70 billion baht in revenue, a 13% increase year-on-year.
However, airfares remain a challenge for the low season as geopolitical tensions affect fuel costs, he said.
Travellers might delay their plans for long-haul trips, particularly groups such as families, said Mr Siripakorn.
From the end of May, SCAT Airlines is slated to start direct chartered flights from Almaty, Kazakhstan to Surat Thani with a capacity of 220 seats, while Iberojet is scheduled to operate flights from Madrid to Bangkok with 432 seats.
In July, Thai Airways is scheduled to offer direct flights to two cities in Europe: Oslo and Milan.
Santisuk Klongchaiya, chief executive of Thai AirAsia, said the domestic aviation market in the second and third quarters still needs promotions as travel demand is weak.
The airline plans to partner with the TAT to offer lower airfares to second-tier cities to increase traffic during the off-peak season, while maintaining demand on key routes by holding the AirAsia Festival in Phuket.
However, he said positive momentum in the international market is expected to continue from the fourth quarter of last year and first quarter of this year thanks to the permanent visa exemption deal with China and extended visa-free schemes for Taiwanese and Indian tourists until Nov 11, 2024.
As the Middle East conflicts continue, Mr Santisuk said the airline is monitoring fuel prices in the global market.
Even though fuel prices remain high, he said they are not fluctuating as much as in the past.
Typically Thai AirAsia would adjust the fuel surcharge when prices rose and might consider partially hedging fuel prices, said Mr Santisuk.
However, as prices are more stable now, fuel hedging is unnecessary, he said. Instead, airlines in Thailand are waiting for the new finance
minister to consider their proposals on reducing the excise tax, which would reduce costs for domestic travellers.
Mr Santisuk said Thai AirAsia will expand domestic and international routes in the third quarter, starting with Bangkok Suvarnabhumi to Hat Yai and Bangkok Don Mueang to Beijing from July 1, with more routes to China planned.
In the second quarter, the airline launched two new routes under the fifth freedom rights, including Bangkok Don Mueang-Taipei-Okinawa and Bangkok Don Mueang-Kaohsiung-Tokyo Narita.
At the end of the second quarter, Thai AirAsia is estimated to have 57 jets in its fleet, as one new Airbus A321neo is scheduled to be added in June.
The airline plans to increase the total to 60 to cater to growing demand, he said.