Saturday, August 21, 2010

AirAsia chief pushes for budget carrier hub at Don Mueang

31 May 2010

AirAsia group chief executive Tony Fernandes has urged Thai authorities to dedicate Don Mueang Airport as a hub for low-cost carriers (LCCs).

Fernandes: AoT airport tax is too high

Mr Fernandes renewed his call for Airports of Thailand Plc (AoT) to establish a terminal devoted to no-frills airlines in Bangkok, complete with lower operating charges than at the main terminal.

Building an LCC terminal at Suvarnabhumi would take time. Mr Fernandes said turning Don Mueang into a base for budget carriers offered a quick solution that would help Thailand woo back foreign tourists whose numbers have plunged as a result of the deadly civil unrest in the capital.

"Maybe now is the chance to do something quick, by turning Don Mueang into a low-cost airport," Mr Fernandes told the Bangkok Post.

The leader of Asia's largest budget airline has said the failure of Thai authorities to set up such a terminal has hampered the growth of the country's tourism industry.

A terminal for budget carriers with lower charges would enable LCCs to bring in more foreign tourists quickly as they would have greater scope for lowering fares due to the increased savings.

Mr Fernandes said AoT's passenger service charge, or airport tax, must be reduced from 700 baht per head to make visiting Thailand more attractive during the current time of poor travel sentiment.

"I strongly feel that 700 baht is too high," he said.

AoT's international travel PSC is among the highest in Asia. The AirAsia chief said it should be slashed for budget carriers to 250 baht, the same price as in Malaysia.

Kuala Lumpur International Airport (KLIA) significantly increased its earnings from budget travellers when it built the Low-Cost Carrier Terminal (LCCT), said AirAsia executives. AoT could emulate this success, they said.

AirAsia Group moved 12.6 million passengers through the LCCT last year, contributing about 43% of total passenger traffic at KLIA.

The group was also the largest contributor of domestic and international traffic at the LCCT last year.

It is also the second largest carrier at Suvarnabhumi in terms of passenger numbers. The eight-year-old airline now operates 973 flights per week through Suvarnabhumi. Last year, Thai AirAsia carried 6.2 million passengers and has the same target this year.

But building an LCC terminal at Suvarnabhumi or dedicating Don Mueang as an LCC airport are not currently on AoT's agenda.

Don Mueang has been heavily underutilised, serving only a few dozen flights operated by two budget carriers, Nok Airlines and One-Two-Go Airlines, and a couple of charters each day.

The majority state-owned airport operator is pursuing a new plan to construct a satellite passenger terminal and related facilities including an automated people mover linked to Suvarnabhumi's current main terminal.

It was revised earlier this year from the previous plan calling for the construction of a domestic passenger terminal and a third runway, which are now seen as lower priorities.

Bangkok Post

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