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MARCH 2019

Week 11


Bangkok Airways pivots to Indochina

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March 15th 2019

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Suspended China markets will resume while overall fleet decreases by two. Read More »

Bangkok Airways is pivoting to Indochina while monitoring sentiment in China, where outbound demand for Thailand softened after 47 Chinese tourists died in a boat accident in July 2018. Mainland Chinese comprised 28% of all visitors to Thailand in 2018. Arrival figures declined year-on-year from July to November. Growth resumed in December 2018 and through January 2019, the latest figures available.

Bangkok Airways’ 2019 international growth is so far within the Cambodia, Laos, Myanmar and Vietnam (CLMV) region, adding two routes: four weekly Bangkok-Cam Ranh (Nha Trang) and three weekly Chiang Mai-Luang Prabang. Bangkok-Danang will grow from daily to double daily.

Domestically, daily Chiang Mai-Krabi will be added while Krabi-Bangkok will increase from three to four daily.

From the summer schedule, Bangkok Airways will operate from Samui to Chengdu four weekly. After the boat accident, Bangkok Airways decreased Samui-Chonging from three to one weekly and suspended Samui-Guangzhou. Chongqing’s three weekly flights will be restored while Bangkok Airways waits for demand to improve before resuming Guangzhou.

Bangkok Airways is to an extent a virtual airline: 24% of passenger revenue is sold from codeshare and interline partners. Despite China accounting for 28% of visitors to China, Bangkok Airways’ point of sale in China is only 8%, but this grew 15% in 2018 despite Chinese visitors growing only 7%.

There are 27 codeshare partners but only one Chinese airline: Xiamen Airlines. Other Chinese airlines are in Bangkok Airways’ roster of 71 interline partners.

In comparison, Europe and the Middle East combined account for 26% of POS and 20% of visitor arrivals. There is a natural skew since intercontinental visitors tend to travel longer and/or visit multiple cities in the region, but Bangkok Airways reckons it has large POS growth opportunity in China. It is partnering with Chinese online travel agencies and last year expanded payment options to include WeChat, AliPay and Union Pay.

The Bangkok Airways fleet will decrease from 40 to 38. Three aircraft are joining the fleet (one A319 and two ATR72-600s) while all five ATR72-500s are removed. The airline is considering re-fleeting options and could make a decision this year.

Bangkok Airways intends to add two or three new codeshare partners. By the end of July, it expects to complete its migration from Sabre to Amadeus.

Management was abruptly changed in January when Bangkok Airways president Puttipong Prasarttong-Osoth became CEO and vice-chairman. He replaced his father, Prasert Prasarttong-Osoth, who was prohibited from holding executive positions in listed companies after Thailand’s regulator found he manipulated company stock. He plans to contest the allegation.

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