Thai Lion Air estimates the Chinese market will remain stagnant this year based on declining safety confidence in Thailand over the short term and a stagnant mainland economy throughout 2025, prompting the airline to pivot to India and domestic demand.
Aswin Yangkirativorn, chief executive of Thai Lion Air, said safety concerns during the upcoming Lunar New Year would cause the Chinese market to plunge 20%, though the impact is expected to be temporary.
As of Jan 15, at least 40 charter flights from China had been cancelled during the holiday starting later this month, while new bookings from independent tourists also slowed.
However, the greater long-term impact for this market is economic stagnation continuing from last year, resulting in an average load factor of only 50% -- lower than the average load factor of all international routes of 70% in 2024.
Nuntaporn Komonsittivate, head of commercial at Thai Lion Air, said prior to the pandemic, flights bound for China were dominated by Chinese passengers, but the market share of Thai passengers last year increased to 50% after the permanent visa scheme between the two countries was initiated in March.
"We will try to maintain the frequencies of our six routes to China, banking on Thai passengers as a driver. We will also pivot to other routes with high potential, particularly India which the airline has aggressively expanded to seven cities since 2024 -- already exceeding China," she said.
Thai Lion Air has a plan to add 14 aircraft this year, comprising Boeing 737-800 and Boeing 737-900.
During the first quarter, it will import at least four aircraft to cater to high demand during the Songkran holiday period, as well as new routes planned for the first half, such as direct flights to Bali, Okinawa via Kaohsiung, and Nagoya via Taipei -- each with four flights per week.
Mrs Nuntaporn said it would also strengthen existing routes with more services, increasing flights to Jakarta to double daily from once daily, along with adding seats for some domestic routes, which have problems of expensive airfares due to limited capacity against high demand, in order to help lower average airfares.
In 2025, she said the average airfare for domestic routes would remain unchanged at around 1,200-1,500 baht.
She said all low-cost carriers in the country might not increase their airfares as an acceptable rate for domestic passengers is restricted at no more than 1,500 baht.
Mrs Nuntaporn said Thai Lion Air this year expects to gain an average load factor of international routes at 57% and domestic routes at 85%.
Last year, the airline carried 6 million passengers, which remained lower than half the 13 million passengers gained in 2019.
"For Thai aviation, we've started to see a strong recovery in 2023, but the momentum has shifted positively with a more established market in 2024, paving the way for us to plan a large fleet increase this year," said Mrs Nuntaporn.
