News
LCCs keep AOT on growth trajectory as THAI struggles
February 16th 2015
Air traffic at Thailand’s six main airports, operated by Airports of Thailand (AOT), climbed 2.5% to a record 90.53 million passengers last year as LCCs continued their aggressive expansion, unfazed by the country’s political crises and airport capacity shortages. Read More » In 2014, Thailand’s domestic traffic grew at a brisk 16%, while international passenger numbers dipped 5.6%. AOT told Reuters it planned to expand capacity at Suvarnabhumi, Don Mueang and Phuket,its three largest airports, by an average 53% in the next four years “to ease capacity bottlenecks and reap the rise in traffic”.
At year end, Thai AirAsia will still be the largest LCC in Thailand, with a projected fleet of 45 A320 aircraft, followed by Nok Air (28 B737s), Thai Lion Air (18 B737s) and latest entrant, Thai VietJet Air, with three A320s. Thai Lion Air is considered a sleeping giant, with Indonesian owner Lion Air Group’s backlog of 450 Airbus and Boeing aircraft. Lion Air’s story in Thailand could be a talisman for the future of Thai aviation. Thai Lion Air increased its domestic share from 3% in 2014 to 17% at press time. The carrier has announced plans for domestic expansion, and said it is in the process of obtaining permits to fly to China, while working at increasing the utilization rate, from nine to 12 hours a day, on its B737-900ER fleet.
Thai Airways International (THAI) president, Charumporn Jotikasthira, last week said THAI’s 2015 “performance will be negative” because it has “to book huge expenses related to the restructuring” approved last month. The programme includes reducing operating costs and capacity by 20% by 2016, selling and decommissioning planes in 2015 and making significant contributions to employee retirement schemes to encourage the voluntary retirement of up 5,000 of its 25,000 employees. As reported last week, THAI will axe its services to Madrid and Moscow, while deliberating on cuts to Brisbane, Brussels, Colombo, Denpasar, Hyderabad, Los Angeles, Milan, Rome and Sapporo. Interestingly, long-haul LCC, Thai AirAsia X, last week announced a daily Don Mueang – Sapporo A330-300 service from May 1.
