Thai AirAsia takes on Indochina incumbents

Bangkok Post BUSINESS NEWS - Tuesday 20 September 2005

Thai AirAsia takes on Indochina incumbents


BOONSONG KOSITCHOTETHANA

The no-frills carrier Thai AirAsia will start flying to Hanoi and Phnom
Penh in the next few weeks in a move expected to dramatically change
the air travel market in Indochina in terms of fares and how people
travel. Daily services from Bangkok to Hanoi will begin on Oct 17,
followed by Bangkok-Phnom Penh flights on Nov 1.

Conventional carriers including Thai Airways International are expected
to lose business and consequently attempt to close the fare gap with
the budget rival, industry executives say.

On the Bangkok-Hanoi route, THAI charges 13,785 baht for a round-trip
economy-class seat and Vietnam Airlines charges 17,480 baht.

Thai AirAsia will offer an introductory one-way fare of just 1,449
baht, excluding extras such as the fuel surcharge and tax.

Thai AirAsia, 51% owned by Thailand's Shin Corp and 49% by Malaysia's
AirAsia, will be the second low-cost carrier to fly to Hanoi, after
Singapore's Tiger Airways, which began services from Singapore on April
1.

However, Thai AirAsia will be the first budget carrier to operate on
the Bangkok-Hanoi route, long dominated by THAI and Vietnam Airlines,
using a 148-seat twin-jet Boeing 737-300.

Executives said Thai AirAsia hoped to attract all types of passengers _
businessmen, tourists and first-time locals in Vietnam where the
economy is growing rapidly along with higher disposable income.

Hanoi was not the carrier's first choice in Vietnam. It had hoped to
serve Ho Chi Minh City but it could not obtain the rights from the
Vietnamese authorities, who cited constraints at Tan Son Nhat
International Airport.

Likewise, Phnom Penh was the carrier's second choice in Cambodia after
Siem Reap, the site of the famous Angkor Wat temples, but Cambodian
authorities still want to reserve the route for conventional carriers
such as Bangkok Airways.

Thai AirAsia expects to charge an introductory one-way fare of 999 baht
on the Bangkok-Phnom Penh route, excluding other fees.

Insiders said the airline would continue to pursue the rights to fly to
Ho Chi Minh City and Siem Reap, where traffic is heavier than to the
capitals.

Thai AirAsia chief executive Tassapon Bijleveld said he expected a load
factor of at least 80% on the Bangkok-Hanoi route. ``This route always
has lots of passengers,'' he noted.

More than 20 international airlines currently operate in the Vietnamese
market.

Thai AirAsia claims to have carried two million passengers since its
inception about 18 months ago.

Seats for Bangkok-Hanoi route will be open for booking starting on
Friday.

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