Thailand-China LCC Expansion Drives Enormous Tourism Growth

China, Thailand, air transport, low cost airlines

The Centre for Asia Pacific Aviation (CAPA) released some figures and a report showing how low cost airlines are a major engine to growth for Chinese tourism into Thailand. 

Thailand-China has emerged as one the largest and fastest growing air travel markets in the world. There are currently close to 1,300 weekly flights from Thailand to China, generating 250,000 one-way seats. Seven years ago there were 200 weekly flights, generating only 40,000 one-way seats.

Thailand has become the most popular destination for Chinese travellers outside Greater China. Chinese visitor numbers to Thailand are on pace to exceed 10 million in 2018, compared to less than two million in 2011. Airlines of all types from both countries have benefitted from the rapid growth in Thailand-China travel. However, LCCs in particular have grown rapidly. The LCC penetration rate in the Thailand-China market has grown over the past seven years from only 7% to 44%, and is poised to increase further as all of Thailand’s LCCs are now banking heavily on China as they expand.

Don Mueang-China capacity has more than quadrupled over the past four years, from 13,000 to 15,000 weekly one-way seats in summer 2014 to more than 70,000 weekly one-way seats during peak periods this summer.

All five of the LCCs based at Don Mueang have pursued rapid expansion in Thailand – Nok Air, NokScoot, Thai AirAsia, Thai AirAsia X and Thai Lion Air. These LCCs currently have approximately 60,000 weekly one-way seats from Don Mueang to China, compared to only 13,000 seats four years ago. Thai LCCs currently account for approximately 32% of total Thailand-China seat capacity, compared to only 10% three years ago.

Thai Lion becomes the largest foreign LCC in China

In particular, Thai Lion has expanded its Chinese network rapidly since launching flights to China in early 2016. Thai Lion is currently the largest airline in the Thailand-China market, accounting for approximately a 15% share of seat capacity.

Thai Lion is also now the fourth largest foreign airline in the Chinese market by capacity – and the largest from Southeast Asia (based on weekly seat capacity). Thai Lion operated 28 routes to China this summer: 16 from Don Mueang, nine from Phuket, one from Chiang Mai, one from Chiang Rai and one from U-Tapao.

In early 2018 Thai Lion overtook Thai AirAsia, which launched services to China in 2005 and for more than 12 years was the largest LCC in the Thailand-China market. For nearly two years Thai AirAsia was also the largest airline overall in the Thailand-China market (after overtaking Thai Airways in 2016).

Spring is the largest Chinese airline in Thailand 

Chinese LCC Spring Airlines is the largest Chinese airline in the Thailand-China market, with a 9% share of seat capacity. Spring has 22 routes to Thailand: 11 to Bangkok Suvarnabhumi, six to Phuket, two to Chiang Mai, two to Krabi and one to Surat Thani.

Suvarnabhumi is the Bangkok airport for almost all foreign airlines, including foreign LCCs. China Express is a rare exception as it operates to Don Mueang.

China’s three main full service airlines – China Eastern, China Southern and Air China – are the second, third and fourth largest Chinese airlines by capacity in the Thailand-China market. The China Eastern subsidiary Shanghai Airlines is the fifth largest and is also among the top 10 airlines in the Thailand-China market.

There are a total of 21 Chinese airlines serving Thailand, which combined account for approximately 54% of Thailand-China seat capacity. Only two of these airlines are LCCs: Spring and Lucky Air. While Spring is the third largest airline in the Thailand-China market (behind only Thai Lion and Thai AirAsia) by capacity, Lucky is small, with only a 1% share of Thailand-China seat capacity.

Top 10 airlines in Thailand-China market by one-way seat capacity: summer 2018

Source: CAPA – Centre for Aviation & OAG