Budget airlines to raise domestic fares by 150 baht
Airlines have made a concerted decision to raise airfares by 150 baht per domestic ticket to reflect a 1,900% hike in excise tax on jet fuel.
At least four operators, all low-cost carriers (LCCs), confirmed the increase: Thai AirAsia, Nok Air, Thai Lion Air and Thai Vietjet Air.
Full-service carriers, including Thai Airways International (THAI), 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 figures.
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.
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.
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.
A senior executive of Thai Lion Air told the Bangkok Post yesterday that the higher fares 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 LCC growth.
Somchai Poolsavasdi, director-general of the Excise Department, told reporters that the tax hike will contribute 4 billion baht to national coffers this year.