Thai AirAsia seeks regional expansion

27 October 2009

With the domestic market becoming saturated, the budget carrier Thai AirAsia needs to spread its wings regionally to support its aggressive growth plan.

The split in business between regional and domestic flights, now roughly 50:50, would be 70:30 within five five years, said chief executive Tassapon Bijleveld.

Any cities within a four-hour flying range from Thailand are on the airline's radar screen for possible regular flights by Thai AirAsia, he said.

High on its immediate agenda is the inauguration of services to India, probably starting in December with a Mumbai-Bangkok service.

Thai AirAsia is preparing to start daily services on the Phuket-Hong Kong and Phuket-Jakarta routes on Nov 15, followed by flights from Phuket to Chiang Mai, Medan in Indonesia and Ho Chi Minh City in Vietnam in December.

But the airline has no plans for Siem Reap in Cambodia and Luang Prabang in Laos, two tourist destinations it has been keen to serve due to high traffic potential, especially among backpacker tourists, its main clientele. "They are not our priorities," Mr Tassapon said.

He noted that Thai AirAsia would rather not enter Siem Reap, the site of the Angkor temples and a route pioneered by Bangkok Airways "out of our respect" to the the privately owned Thai regional airline.

While other airlines have made cutbacks in the wake of the global economic downturn and other negative factors including Thai political turmoil, Thai AirAsia has been steadfast in bucking the trend.

Its aggressive regional expansion is intended to keep pace with its growth in capacity resulting from fleet expansion which includes the addition of higher-capacity jetliners including the Airbus A320.

The airline's current fleet comprises 10 Airbus A320s and six Boeing 737s. Toward the end of this year, the airline will take delivery of two new A320s. Next year, it will receive eight more new A320s and phase out six B737s.

Thai AirAsia's A320 can carry 180 passengers in one class, with 20% more seats than the ageing B737.

By 2011, there will be 25 aircraft in Thai Asia's all-A320 fleet and the number will grow to 30 in 2012 before reaching 40 subsequently.