Passengers to Fetch an Additional THB150 on Domestic Flights in Thailand

A new THB150, the equivalent of US$4.20, is being added by all Low Cost Carriers from this week following the increase of the Excise Tax on jet fuel and lubricants by the Excise Department. The increase excise tax has been raised from today from 20 satang to 4 baht. This represents a hike of almost 2000 percent and should fill the Kingdom’s coffers with an additional THB 4 billion in revenues in one year (the equivalent of US$114 million).

Following the cabinet’s decision, Thai AirAsia announced in a statement on Mon day that it will match the additional cost on fuel jet by imposing a surcharge of 150 baht per passenger per flight for domestic destinations. The amended fares are effective since February 1st, 2017 onward.

Although the sum seems minimal, it will on end fares mean an increase of up to 25% as many starting fares are sold between THB650 and THB900. This could weight on the country’s air transport activity by discouraging some domestic travellers of flying.

According to data communicated by the Airports Authority of Thailand -which runs six of the largest airports in the Kingdom-, total domestic passengers last year increased by 12.6% to 53.28 million. By adding other airports, total domestic transport is likely to have reached last year 56 to 57 million passengers. The largest number of passengers on domestic destinations was recorded at Bangkok Don Mueang, which represented a market share of close to 44%, the equivalent of 23.3 million passengers. Bangkok Suvarnabhumi had a total of 9.8 million domestic passengers followed by Chiang Mai with 7.35 million, Phuket with roughly 7 million and Hat Yai with 3.75 million passengers.

Meanwhile Nok Air, Thai Lion Air and Vietjet announced to add 150 baht on their tickets for domestic flights, effective February 6. Thai Airways, Thai Smile and Bangkok Airways did not so far announce any hike to this date but a decision should be rapidly taken in a similar direction.