Thai AirAsia CEO urges government to curb rising travel costs

Thai AirAsia‘s chief executive Santisuk Klongchaiya advocates for government intervention to mitigate escalating travel expenses for tourists, alongside the visa-free scheme for Chinese visitors. He justifies this by citing the disproportionate resumption of travel demand compared to the supply side, particularly in the airline industry, in the past year.

Thai AirAsia’s capacity to serve China routes has notably reduced. Previously, they operated 148 flights per week, but currently, they only manage 104 flights per week. This reduction has caused the average airfare in the first quarter to spike by 100-200% compared to the corresponding period in 2019, with the average load factor surpassing 80%.

However, the airline reports a decrease in airfares for Chinese routes during the off-peak season due to seasonal factors and slow purchasing power, resulting in an average load factor of 60-70%. On the other hand, the consistent growth in local travel demand since the pandemic has caused an average load factor of over 90% for domestic flights, thereby inflating the average airfare of local airlines.

The government’s visa-free policy that started on September 25 is anticipated to boost the number of Chinese arrivals. However, Santisuk expects a delay until November to witness a significant increase, as potential travellers may want to consider feedback from other visa-free visitors to Thailand in September and October before making their travel plans.

According to Santisuk, the slow economic growth in the Chinese market poses a challenge in stimulating demand. He expressed concerns over the sustainability of the robust travel demand experienced in the past year, particularly in the face of stagnant economic growth and escalating travel costs.

Santisuk said that airlines will not be able to reduce airfares in the near future due to rising fuel costs and a weak baht unless other airport expenses such as navigation fees and the excise tax on jet fuel can be streamlined.

He suggested that the government could consider lowering fees for aviation-related services at airports as an indirect means of helping airlines cut costs and reduce airfares for passengers, reports Bangkok Post.

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