After enjoying a robust market throughout 2023, Thai AirAsia started to experience lower demand during the second and third quarters, which requires immediate stimulus from the government to help alleviate the stagnant local purchasing power.
Santisuk Klongchaiya, chief executive of Thai AirAsia, said the usual seasonality of tourism had returned this year as the average load factor of the domestic market during the second quarter dropped slightly to 90% from 94% year-on-year.
He said the strong performance in 2023 was still buoyed by strong pent-up demand from the pandemic, which resulted in a consistently high load factor throughout the whole year.
The domestic load factor in the second quarter was also lower than the historic high of 96% in the first quarter of this year, as tourists returned to the regular travel pattern, which is mostly concentrated during the high season.
In terms of international routes, he said the carrier’s average load factor hovered around 90% in the second quarter, up from 83% in the corresponding period of 2023, but remained at the same level as in the first quarter of this year.
However, full recovery for the airline as well as the whole tourism industry is contingent on the Chinese market, as Thailand is unlikely to gain 8 million as the government had targeted for 2024.
“About 6-7 million Chinese tourists this year is the most likely scenario. To reach 8 million, there must be stimulus to accelerate demand as the Chinese government is now quite active in terms of promoting its domestic tourism,” said Mr Santisuk.
He said airlines in Thailand still want the government to consider reducing the jet fuel excise tax from the current rate of 4.726 baht per litre, which would definitely help lower travel costs for domestic tourists.
He said the airline is planning to open at least 4-6 international routes in the second half, which would likely include Hyderabad (India), Kathmandu (Nepal) and Phu Quoc (Vietnam).
Regarding domestic routes, Mr Santisuk said the airline would open a new route to Lampang for the first time with seven flights per week, starting in October.
He said this route would be the 25th domestic destination for Thai AirAsia, increasing the number of domestic flights to 612 per week from 35 domestic routes.
By the end of this year, Thai AirAsia aims to operate with 60 aircraft, which is still lower than the number deployed before the pandemic (63), but an improvement on the 53 deployed during the pandemic.
Somradee Chitchong, deputy governor for domestic marketing at the Tourism Authority of Thailand, said tourism receipts of Lampang stood at 2.6 billion baht in the first six months, mostly driven by local travellers, accounting for 2.38 billion baht of the total. Bangkok Post
