Thai AirAsia cuts 2014 passenger estimates

– Thailand business news selected by Gazette editors for Phuket’s international community

PHUKET: Thai AirAsia Co has lowered its passenger projection for this year from 13.2 million to 12.6 million because of the political crisis that has hit inbound travel during the past two months.

Santisuk Klongchaiya, director of commercial operations, said the airline had also lowered its estimate of the average load factor for 2014, initially set at 83 per cent, to 80 per cent. Total income and profit are also expected to be lower than previous projections.

The declines are a result of the military seizing power from the elected government last month, as inbound tourism became sluggish after about 70 countries warned their citizens to avoid travelling to Thailand.

Furthermore, growth in passenger numbers is expected to drop from the original projection of 30 per cent to 15-20 per cent this year for the same reason.

Santisuk said Thai AirAsia would delay the delivery of three aircraft set for this year. The airline so far has received four planes since January and will get one more in September.

Last year was one of the best for Thai AirAsia with a load factor over 80 per cent, and it had hoped for a similar figure this year.

Despite a slow May and June, new bookings for July and August have bounced back to 80 per cent of capacity, and those for September had already reached 30 per cent as of yesterday.

The airline also remains committed to network expansion both domestically and overseas.

In the domestic market, Thai AirAsia yesterday announced a new route between Bangkok (Don Mueang) and Sakon Nakhon in the Northeastern region. The new service will begin on October 1 with two daily flights.

Passengers who make reservations online from now until August 10 will enjoy an introductory fare of 390 baht.

The route is expected to run an 80-per-cent load factor during peak season.

Thai AirAsia already operates four other routes from Bangkok to the Northeast – Udon Thani, Khon Kaen, Ubon Ratchathani and Nakhon Phanom.

Santisuk said the airline also planned to link Chiang Mai or Phuket with overseas destinations, particularly in China, in order to meet high demand. Chinese tourists are expected to flock into the Kingdom now that visa fees have been waived for them.

Thai AirAsia is also making some strategic plans to deal with Thai Smile Air’s planned relocation from Suvarnabhumi Airport to Don Mueang International Airport in the near future.

Santisuk said Thai AirAsia was confident of remaining the biggest player in the low-cost domestic market.

At Don Mueang, it holds 60 per cent of the market while the rest belongs to Nok Air.

In the wake of the two disasters hitting Malaysia Airlines, AirAsia Group operating in and out Malaysia is reported to have gained a lot of passengers, including Chinese.

However, only a few passengers have shifted to Thai AirAsia.

— Phuket Gazette Editors