Did Thai AirAsia Really Exhaust Its Possibilities of Growth out of Thailand?

AirAsia Group network between Thailand and ASEAN- February 2017

An interview from the Bangkok Post dated February 17 with Santisak Klongchaya, Commercial Director of Thai AirAsia stressed the fact that the carrier had limited margin to further grow out of Thailand… Is it the reality ?

According to the interview with Santisak Klongchaiya to Thailand’s largest newspaper, the Bangkok Post, Thai AirAsia does not know how and where to put the six new Airbus A320 that the airline will receive this year as the budget carrier seems to have exhausted all the possibilities for new destinations both on  domestic and international fronts.

In the interview, TAA Commercial Director indicated that “there are virtually no domestic airports capable of handling its Airbus 320 jet with 180 seats where the country’s largest low-cost carrier can extend its service”. The Bangkok Post indicates that the airline reached its maximum capacity on Thailand trunk routes such as Bangkok-Chiang Mai, Bangkok-Hat Yai or Bangkok-Phuket. Competition is also intense on domestic fronts with up to seven carriers serving often the same routes (Thai AirAsia, Thai Airways International/Thai Smile, Bangkok Airways, Nok Air, Thai Lionair and Thai Vietjet)

The Bangkok Post adds that “new destinations with visible traffic potential in neighbouring countries are increasingly hard to find, largely due to the carrier’s aggressive expansion in the past”.

Asked about the carrier’s explanation, Thai AirAsia Spokesperson Wanant Kerdchuen declares to ASEAN.Travel: “to clarify the point from Bangkok Post’s report, AirAsia Group’s network covers extensively main destinations with visible traffic in Southeast Asia. The airline is looking at every possibility to expand the network as long as there are sufficient infrastructure and conducive regulations at a destination. Thai AirAsia is working at its best capability for route expansion, and at the same time leveraging its group’s capacity to provide our guests with more destination options”.

It is true that Thai AirAsia has already an extremely extensive network from Bangkok to Southeast Asia. The carrier and associate airlines from the AirAsia Group (AirAsia Bhd and Indonesia AirAsia) flies to 34 destinations including 19 within Thailand. Finally inside ASEAN, TAA and partners connect Bangkok to “only” 15 destinations. They are still many gaps in the low cost carrier network within ASEAN. Neither TAA or Philippines AirAsia fly Bangkok-Manila while they are still no flights linking Bangkok to Brunei. Both routes certainly offer potential to attract passengers.

The fact that there is an open-sky agreement within ASEAN which gives rights for any ASEAN carrier to fly from capital city to capital city or from capital city to secondary city, should clear any potential restriction for the AirAsia Group. Looking at missing links for the group, there is certainly more routes to be opened to Indonesia (Surabaya or Yogjakarta for example), to the Philippines (Clark or Cebu), to Malaysia (Kuching or Ipoh) or to Vietnam (Danang or Nha Trang).

“For now, Thai AirAsia is looking forward to adding new routes focusing on secondary cities connection, as well as increasing frequency on existing routes”, highlights TAA Spokesperson. In Thailand, the airline will continue to densify its network out of regional destinations.
Possibilities exist also to connect more Thai provincial destinations to ASEAN. Hanoi-Chiang Mai, Jakarta-Phuket, Jakarta-U Tapao or Penang-U Tapao or Kuala Lumpur-Chiang Rai could make sense.
Meanwhile, the carrier announced last week to launch two new inter-regional connections out of U-Tapao/Pattaya airport to Phuket and Ubon Ratchathani. Both routes will start on March 30 with a daily flight.
TAA hopes that the government would also upgrade some domestic airports to allow the Airbus A320 to land. According to Santisak Klongchaiya to the Bangkok Post interview, TAA would love to fly to provincial airports such as Mae Sot, Lampang, Chumphon and Mae Hong Son, on condition that they upgrade their facilities.