Ticket turbulence: Thai airlines aim to price things right amid rising costs

Thai airlines plan to explain the accusations of raising ticket prices amid higher jet fuel costs. The Airlines Association of Thailand (AAT) announced it will host a seminar to clarify airfare structures and CAAT price regulations following consumer complaints.

Nok Air CEO Wutthiphum Jurangkool stated that price increases mainly occurred during extended holidays due to high demand, impacting last-minute bookings. The 42 year old clarified that airlines adjusted fares in response to rising operational costs, especially jet fuel expenses, rather than excessively raising average prices for extra profit.

Wutthiphum mentioned the rising jet fuel cost, hitting US$119 (4,232 baht) per barrel, exceeding IATA’s 2023 estimate of US$98.5 per barrel. He highlighted airlines’ struggles during the low-demand season, making it difficult to cover these higher costs without incurring losses on each flight.

Nok Air‘s CEO noted a significant drop in domestic demand in September with load factors below 80% and average prices below 1,000 baht per flight. He criticized the static regulated ceiling prices set by CAAT.

Nuntaporn Komonsittivate, Thai Lion Air’s Head of Commercial Operations, mentioned a 75% average load factor for domestic flights, expecting it to reach 85% during the high season. Chinese passenger demand, particularly for the October National Day holiday, is seen as a potential boost. Despite concerns among Chinese netizens, Thai Lion Air plans to resume all 17 pre-pandemic routes due to ongoing demand.

Nuntaporn suggested a government-promised visa-free policy could speed up market recovery. Wutthiphum noted a September drop in Chinese air traffic but anticipated a boost in early October during the long holiday, with Chinese route load factors exceeding 90%. He also mentioned Nok Air’s expansion plans to eight additional Chinese cities and the revival of direct Phuket and Chiang Mai routes to China, previously suspended during the pandemic.

In related news, the IATA reported a 105.8% increase in July traffic for Asia-Pacific airlines compared to the same period last year, with the load factor rising to 84.5%.

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