Thai AirAsia goes for bigger market share

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Thai AirAsia will focus more on the domestic market by increasing its flight frequencies on existing routes to raise its share of this market to more than 40 per cent by the end of the year from 38 per cent currently.

The plan will be supported by delivery of seven new Airbus A320s this year. Over the next three years, its market share at home is projected to increase to more than 50 per cent, with the arrival of six new A320s each year until 2015, said Tassapon Bijleveld, the company’s chief executive officer.

In 2015, its fleet will comprise about 46 aircraft, up from 34 by the end of this year.

Yesterday, it held a blessing ceremony to welcome the 28th A320 into its fleet. The aircraft’s special characteristic is its “sharklet” wingtip, which Airbus claims allows a fuel saving of 3 per cent compared with its rivals.

Currently, Thai AirAsia operates 174 flights a day to 30 destinations from Don Mueang International Airport, 12 domestic and 18 international. Domestically, its key markets include Phuket, Hat Yai, Krabi and Chiang Mai. The carrier will also increase its frequencies on existing regional routes to China and Indochina.

It projects carrying 10 million passengers, up from 8.3 million last year. Its cabin factor is projected at 82 per cent, the same as in 2012.

Tassapon said the company would add only four new destinations to its network this year. They will be two cities in China, one in Indochina, and one in Bhutan or Nepal.

Last year, nine new destinations were introduced both at home and regionally, including Wuhan, Chongqing and Xi’an in China. The airline enjoys an 82-per-cent combined cabin factor in those three cities.

Yesterday marked the ninth anniversary of Thai AirAsia. It was launched in 2004, with its first flight from Bangkok to Hat Yai. Its business has grown annually. In 2011, revenue was Bt16 billion.

Tassapon declined to disclose its financial-performance projection for this year, but noted that the previous plan filed with the Stock Exchange of Thailand was to grow by 20 per cent annually.

The strengthening baht has not benefited the company, especially its fuel bill. It will have a closer look at the situation, but believes it is only short-term. He believes the suitable rate is slightly more than Bt30 to the US dollar. Currently, the company generates its sales in different foreign currencies such as the rupiah, the dong and the Hong Kong dollar. Baht revenue makes up 50 per cent of the total.

He said the business outlook this year was still good because politics is stable. Only fuel cost is a risk. The company’s boost comes from a growing number of foreign arrivals, thanks to the country’s strategic location as a connecting place to other cities in the region. Chinese in particular come to Bangkok before flying to other cities to explore.