The Phuket News Novosti Phuket Khao Phuket

Login | Create Account | Search

Low-cost flights may get cheaper

Low-cost flights may get cheaper

BANGKOK: Low-cost carriers are ready to lower domestic airfares after the Cabinet approved the extension of jet fuel tax reduction.

By Bangkok Post

Thursday 5 November 2020, 09:38AM

Thai AirAsia and Thai Lion Air jets at Don Mueang airport. Photo: Apichit Jinakul / Bangkok Post

Thai AirAsia and Thai Lion Air jets at Don Mueang airport. Photo: Apichit Jinakul / Bangkok Post

Santisuk Klongchaiya, chief executive of Thai AirAsia (TAA), Thailand’s largest low-cost carrier, said the decision from the government is good news that will help airlines save operation costs and allow them to maintain average airfare prices, reports the Bangkok Post.

If the government asks carriers to keep lowering airfares in exchange for the extension, TAA will discuss seeking practical solutions with the Transport Ministry.

Mr Santisuk said the average ticket price is quite cheap. The rate per flight is around B900-1,000 depending on the destination and booking period.

While TAA can carry on with providing domestic flights by flying 30-40 of 63 jets in its fleet and expects better performance in the last quarter of the year, the carrier still needs the soft loans, which domestic airlines have been requesting for months, he said.

Prime Minister Prayut Chan-o-cha has met airline executives and agreed to allocate B24 billion in soft loans to mitigate the impact of the pandemic. The request has yet to be granted.

“We still have weak demand for weekday flights because of the lack of international tourists who would normally fill this void,” said Mr Santisuk.

Nuntaporn Komonsittivate, head of commercial operations at Thai Lion Air (TLA), said the extension of the excise tax reduction definitely helps lift the cost burden as jet fuel normally takes up 30% of total operations.

If the government would like airlines to help stimulate the domestic market by reducing airfare, TLA is amenable to considering the requests by assessing a price structure appropriate for actual operation costs, said Ms Nuntaporn.

She said average domestic airfare is B1,200-1,500, which is slightly higher than the pre-pandemic period rate of around B1,000-1,200 as the aviation industry has to depend on domestic travellers.

“The average price before the pandemic was too low as there was fierce competition. The current price better reflects the true cost than last year’s prices,” said Ms Nuntaporn.

TLA has 300 flights per week for 13 domestic routes, serviced by 11 aircraft.

Outrigger Laguna Phuket

She said even though the average load factor has climbed to 75%, customers demand fluctuates and is unpredictable.

The airline expects forward bookings for long holidays in November and December to be stronger, but it seems tourists are reluctant to book their trips in advance. The airline has to continue monitoring the market closely, she said.

Ms Nuntaporn said the airline is still waiting for the government’s decision on soft loans.

While the market situation has improved since April, when airlines were severely affected by the nationwide lockdown, additional funds will help improve cash flow and create breathing room for operations.

The mobile Cabinet meeting in Phuket on Tuesday (Nov 3) approved an extension of excise tax reductions for jet fuel for another five months in a move to help alleviate the liquidity of airline operators hard hit by the pandemic.

According to Finance Minister Arkhom Termpittayapaisith, the extension of the excise tax reductions for jet fuel will be effective from today until April 9, 2021.

The Cabinet earlier approved lowering the excise tax on jet fuel to B0.2 per litre from B4.726 in February as part of urgent aid measures for domestic airline operators during the outbreak. The reduction expired at the end of September.

According to Mr Arkhom, the government is estimated to lose B700 million in revenue in the latest extension.

He said the government hopes the extension would help influence airline operators to reduce ticket prices.

Mr Arkhom said the Finance Ministry will consider airline operators’s proposal to ask the government to provide B24 billion in soft loans.


Comment on this story

* Please login to comment. If you do not have an account please register below by simply entering a username, password and email address. You can still leave your comment below at the same time.


CaptainJack69 | 05 November 2020 - 11:40:33

My experience of flying TAA in the last few months has been that weekday flights are about the same price if a LITLE cheaper, weekend flights are VERY expensive, and flights are largely pretty full. Things look far from desperate to me. This reduction in tax needs to actually result in lower real-world prices or the tax payer is being ripped off.


Have a news tip-off? Click here


Phuket community
Phuket police bust island drug network

Kurt, I believe they climbed as far up that tree as they are going to go.... now it is all about neg...(Read More)

Prayut cleared in military housing case

Assemble the words 'conclusion' and 'foregone' in the correct order. The Donald Trum...(Read More)

Arrivals from Myanmar targeted amid COVID-19 fears

" Just plug the natural routes" Kurt, seems like you don't know the meaning of "...(Read More)

More than 200kg of fishing nets collected from Shark Point

"...please do not leave your nets or other waste left so it ends up in the sea." Oh, I...(Read More)

More than 200kg of fishing nets collected from Shark Point

"Mr Prajuab urged fishermen and the general public to be careful about what waste they discard ...(Read More)

Arrivals from Myanmar targeted amid COVID-19 fears

k...this is what you wrote: "violating Thai labor Laws, hiring illegal/under paying Myanmar wor...(Read More)

Government approves 120km/h speed limit

Pascale...agreed. Should have been done years ago...(Read More)

Thai teak seized in SorPorKor raid north of Patong I say get use to it. Can't you work it out, felling trees illegally is like homicide - ...(Read More)

Government approves 120km/h speed limit

Kurt,the logic of this rule is to get rid of people like you, blocking every right lane with their c...(Read More)

Arrivals from Myanmar targeted amid COVID-19 fears

worker from Myanmar. But you are excused for your ignorance. Sitting home and watching TV only can&#...(Read More)