Thai AirAsia passengers do self check-in at Don Muang airport. Thai airlines will pass on the hefty hike in jet fuel for domestic travel to consumers. (Photo: Thai AirAsia)
Surprise govt hike in jet fuel tax leads to immediate 150 baht airfare hike, making low cost airlines less competitive with buses.
Budget airlines to raise domestic fares by 150 baht
Airlines have made a concerted decision to raise airfares by 150 baht per domestic air ticket to reflect a sudden decision by the government to raise the excise tax on jet fuel by a whopping 1,900%
At least four operators, all low-cost carriers (LCCs), confirmed the increase: Thai AirAsia, Nok Air, Thai Lion Air and Thai Vietjet Air.
In other big Asian countries, such as the Philippines, the airfares of low-cost airlines are often as low as and compete with the price of bus tickets and land transport.
There have been signs that this was happening in Thailand also (the price of VIP buses and cheap air tickets are sometimes very close) but the sudden tax increase and subsequent airfare increase may prevent this from happening in Thailand (see here & here)
The sudden unexpected huge jet fuel tax increase, made without industry or public participation or consultation, is projected to contribute 4 billion baht to government revenue this year which is presumably the reason the hike was made.
This is according to Somchai Poolsavasdi, director-general of the Excise Department.
FULL-SERVICE CARRIERS NOT SURE ABOUT PRICE HIKE YET
Full-service carriers, including Thai Airways International (THAI) and its wholly owned subsidiary THAI Smile and boutique airline Bangkok Airways, have yet to make a decision on the extent and time frame of higher fares, according to executives.
Bangkok Airways appeared to be agreeable with the same increase as LCCs but THAI and THAI Smile were still considering the exact amount of the increase.
Industry sources said the three full-service carriers are likely to proceed along the same lines.
"It won't be long before they also impose hikes, given that they are also bearing higher costs," one source said.
CHANGES EFFECTIVE TODAY OR AT LEAST THIS WEEK
Thai AirAsia led the move by announcing yesterday it will charge 150 baht per person on each domestic flight, effective today.
Nok Air, Thai Lion Air and Thai Vietjet Air are to impose a similar amount on all their domestic routes starting on Feb 6.
AIRFARE HIKES REFLECT ACTUAL COST INCREASE
Both Thai AirAsia and Nok Air insist the ticket increase reflects the actual cost increase resulting from the rise in excise tax from 20 satang per litre to 4 baht effective Jan 25.
Thai AirAsia described the increase as a necessary addition, to which the Civil Aviation Authority of Thailand (CAAT), the regulator, did not object.
AIR TRAVEL NOT LIKELY TO BECOME AS CHEAP AS BUSES
A senior executive of Thai Lion Air told the Bangkok Post yesterday that the higher airfares resulting from excise tax hike would complicate LCCs' attempt to make air travel cheap.
"Higher fares will discourage people from flying and turn to ground transport modes," the executive said, calling the tax hike "an effective way to clip our wings".
The hike is expected to curb low cost airline or LCC growth.
Learn from listening
Click "play" to listen to Budget airlines to raise domestic fares by 150 baht and "Download" to keep this file for educational purpose.
actual : real; existing in fact - จริง
addition : more; more than was first mentioned or is usual - ที่เพิ่มขึ้น
agreeable with : maybe willing to agree with; may possibly agree with -
airline (noun): a company that provides regular flights to take passengers and goods to different places - สายการบิน
along the same lines : acting or doing something in the same way -
announce : to tell people something officially, especially about a decision, plans, etc - ประกาศ, แจ้ง, แจ้งให้ทราบ
authority (noun): a person or government agency who has the power to make decisions or enforce the law - เจ้าหน้าที่ผู้มีอำนาจ
bear : to accept, tolerate or endure especially something unpleasant - ทน
boutique : (of a business) small and offering products or services of a high quality to a small number of customers - ร้านเล็กๆ ที่ขายสินค้าหรือบริการที่เฉพาะเจาะจง เช่น ร้านขายสินค้านำเข้า
carrier : a company that carries goods or passengers from one place to another, especially by air - บริษัทขนส่ง (โดยเฉพาะสายการบิน)
charge (verb): to ask an amount of money for goods or a service - เรียกเก็บเงิน
civil aviation : non-military aviation - การบินพลเรือน
clip (verb): to cut something with scissors or shears, in order to make it shorter or neater; to remove something from somewhere by cutting it off ติด - ติด
compete : to try to be more successful or better than somebody else who is trying to do the same as you - แข่งขัน
complicate : to make something more difficult to deal with, do or understand - ทำให้ยาก, ทำให้ซับซ้อน
concerted : involving a lot of people or organizations working together in a determined way - ที่กระทำร่วมกัน
confirm (verb): to state or show that something is definitely true or correct, especially by providing evidence - ยืนยัน
consider : to give careful thought to something before making a decision - พิจารณา
consultation : the act of discussing something with somebody or with a group of people before making a decision about it - การปรึกษาหารือ
contribute (verb): to give something, especially money or goods, to help somebody/something - บริจาค (เงินหรือเวลา), ให้ (เพื่อช่วยเหลือ)
cost : an amount of money that people need to pay for something - ค่า
curb : to control or limit something - จำกัดขอบเขต, ควบคุม
discourage : to make someone feel like something should not be done - ทำให้ไม่อยาก (ทำสิ่งใดสิ่งหนึ่ง)
domestic : inside the country being talked about - ภายในประเทศ
effective : officially begun to be used ; to take effect - มีผล
exact (adj.): done, made, or described in a very thorough way, with all the details correct - ถูกต้องแม่นยำ
excise tax : a tax made by a government on some types of goods made, used sold within their own country - ภาษีสรรพสามิต, ภาษีสำหรับสินค้าในประเทศ
executive : a senior manager in a business or other organisation - ผู้บริหาร
extent : size; the degree to which something happens or is likely to happen - ขนาด ขอบเขต
flight (noun): a trip on an airplane; a plane making a particular journey - การเดินทางด้วยเครื่องบิน; เที่ยวบิน
growth (noun): economic growth, an increase in economic activity - การเติบโต
happen (verb): to do or be something by chance, i.e., not by planning ahead - เกิดขึ้นโดยบังเอิญ, บังเอิญเกิดขึ้น
hike : an increase - การเพิ่มสูงขึ้น
impose : to introduce something and force people to accept it - กำหนด,บังคับใช้
industry : the people and activities involved in producing a particular thing, or in providing a particular service; the production of goods from raw materials, especially in factories - อุตสาหกรรม
international : connected with or involving two or more countries - นานาชาติ, สากล, ระหว่างประเทศ
jet fuel : the energy source for jet planes -
move (noun): action -
necessary (adj.): essential, needful, something that you must do or have - จำเป็น, ซึ่งเลี่ยงไม่ได้, ซึ่งเป็นที่ต้องการ, สำคัญ
object : to disagree with - คัดค้าน
operator (noun): a person or company that runs a business - ผู้ดำเนินกิจการทางธุรกิจ, ผู้ประกอบธุรกิจ
participation : to take part in or become involved in an activity - การมีส่วน
presumably : used for saying that you think something is true based on what you know, although you are not really certain - น่าเป็นไปได้, ซึ่งพอเป็นจริงได้
prevent (verb): to stop somebody from doing something; to stop something from happening - ขัดขวาง, ป้องกัน, กัน, กีดขวาง
proceed : to continue as planned - ดำเนินการ
project : to calculate based on information already known - คาดคะเน, ประเมิน
public : open to people in general - สาธารณะ
reason (noun): why something happened or exists - เหตุผล
reflect : to show - สะท้อน แสดงถึง
regulator : an official (or organisation) who makes certain that the companies who operate a system work effectively and fairly - ผู้มีอำนาจควบคุม
result (noun): a thing that is caused or produced because of something else - ผล,ผลลัพธ์,ผลที่ตามมา
result from (verb): caused by -
revenue : income from taxes or business activities - รายได้
route : the roads, paths, waterways, etc., used to go from one place to another - เส้นทาง
senior : with a high rank or position - อาวุโส
source : a place where information comes from; someone who gives information - แหล่ง
subsequent : happening or coming after something else - ซึ่งตามมา
subsidiary : (of a business company) owned or controlled by another company - บริษัทในเครือ
sudden (adj): happening quickly and unexpectedly กะทันหัน - กะทันหัน
time frame : a period of time when something happens or must happen - เงื่อนเวลา
transport : moving people or things from one place to another - การขนส่ง
unexpected (adj): surprising way because you were not expecting it - ไม่คาดฝัน, น่าประหลาดใจ
wholly (adv): completely - ทั้งหมด, ทั้งสิ้น, เต็มที่
whopping (adj): very large - ใหญ่โต