Low-cost carriers (LCCs) have continued to strengthen their share of overall air traffic through Thailand, but there are signs of a slowdown in the speed of market penetration.
Budget airlines accounted for 46.5% of total passenger traffic passing through the six major Thai airports in the year to Sept 30, up slightly from 44.4% recorded in the previous year, as the shares of full-service carriers (FSCs) kept shrinking.
Passenger number carried by LCCs in the 2017 fiscal year grew significantly slower than in the previous year because of several key factors, including suppressed demand from China caused by the zero-dollar tour crackdowns and a severe shortage in airport slots at primary Thai airports.
LCCs, both local and international, moved 60.1 million passengers through airports operated by the Airports of Thailand Plc (AoT), in fiscal year 2017, up 12.8% year-on-year.
The 2017 fiscal year growth rate of LCC passengers represents a deceleration from 21.1% achieved in previous year which saw a total of 53.3 million, according to AoT figures.
The growth rate of LCC passengers continued to exceed the combined LCC and FSC growth, which edged up 7.73% in the fiscal year 2017 to 129 million. The growth was slower from the 12.3% pace in the previous year, which ended with 120 million passenger.
LCC passenger number passing through AoT airports in the fiscal year 2017 all saw double-digit growth.
More than half of all LCC passengers was through Bangkok's Don Mueang airport, billed as one of Asia's busiest and largest LCC hubs.
The overcrowded Don Mueang handled 35.7 million LCC passengers in fiscal year 2017, up 10.9% from a year ago.
Phuket airport was Thailand's second largest handler of LCC passengers, numbering 7.10 million in the fiscal year 2017, up 16.8% from 2016.
Despite its critical congestion in the wake of capacity deficiency, Suvarnabhumi airport ramped up its LCC passenger number by 18.6% to 5.52 million.
Overall LCC passengers on international flights through the AoT-operated airports increased 14.2% to 21.4 million, with domestic LCC passengers edging up 12% to 38.6 million.
The number of aircraft movements, referred to take-offs and landings, by LCCs through all the AoT-operated airports grew 13.6% in the 2017 fiscal year to 391,780, versus a 13.8% growth a year ago which recorded 345,176.
Meanwhile, total aircraft movements -- LCCs and FSC combined -- grew only 6% in the fiscal year 2017 to reach 823,574. This was a slowdown from 9.83% increase seen in fiscal year 2016 when 776,922 were recorded.
The LCC proliferation mirrors the growing popularity of budget airlines, which offer lower fares than FSCs, roughly by a margin of 30%, their growing networks, additional frequencies and intense sales promotions.
Airline executives said LCCs will continue to flex their muscles, especially in the short and medium-haul routes where budget airlines have become the more acceptable mode of air travel than FSCs. LCCs have become a norm for domestic travel as FSCs struggle to keep their market share.
There are seven Thai-registered budget airlines serving the domestic and international markets. In addition, there 30 foreign-registered LCCs operating flights through Thailand.
Piya Yodmani, chief executive of Nok Air, one of Thailand's top LCC operators in terms of passengers carried, said yesterday Thai airport capacity constraints are preventing LCCs from increasing flights and frequencies.
That may translate into a slowdown in the pace of growth in the overall passenger traffic through Thailand, he told the Bangkok Post.
"Furthermore, the Thai LCC market is overwhelmed by existing key players, cut-throat competition, rock-bottom fares and razor-thin margin. That will make it extremely difficult for a new players to enter the market," he said.