Despite escalating operational prices, Thailand’s airlines are unlikely to trigger a new worth warfare, while the Civil Aviation Authority of Thailand (CAAT) intends to retain the present ceiling for ticket prices. This information was shared by Suttipong Kongpool, the CAAT director, throughout a seminar co-hosted by the Airlines Association of Thailand (AAT) and CAAT this week.
Suttipong indicated that with jet gas prices, a major factor accounting for 30-40% of operational prices, not anticipated to rise past US$120 per barrel within the near term, the regulated ceiling worth would remain unchanged for no much less than three years.
As per CAAT rules, the upper limit for low-cost airfares is about at 9.four baht per kilometre, while full-service airfares are capped at 13.zero baht per kilometre. Suttipong noted that regardless of the pandemic-induced spike in gas costs to US$170-180, the value ceiling remained unaltered.
CAAT does not intend to ascertain a minimum price, as lower airfares could be advantageous to passengers, particularly those who secure their tickets ahead of time.
Suttipong suggested that the potential for airways partaking in a price war, as skilled in 2019, is low, contemplating the previously high revenue levels that resulted from the big passenger volume. He stressed that a price war could be detrimental to airways and the aviation ecosystem, especially in the wake of the pandemic’s influence, reported Bangkok Post.
Releasing booking information on the seminar for a flight scheduled from Bangkok’s Don Mueang Airport to Phuket on May 19, 2023, CAAT revealed that 32.8% of passengers paid lower than 1,000 baht, while 37.9% paid between 1,001 and 1,500 baht. Only 0.8% of passengers bought tickets at a price between three,501 and 4,000 baht.
This is a reflection of airlines’ dynamic pricing strategy, which presents the cheapest costs to early birds, with prices escalating as more seats are occupied. AAT president Puttipong Prasarttong-Osoth acknowledged that airways would wish a load issue of 70-80% to cowl all prices and generate a revenue.
The association is optimistic that the government will reduce the jet gasoline excise tax fee from four.726 baht per litre to a extra reasonable rate, as the tax raises airlines’ bills by 20%.
Certain airways in Thailand are also adopting a pay-to-fly scheme for pilots looking for a licence for specific aircraft varieties.
Suttipong explained that it is a widespread practice for airways to transfer substantial training costs to pilots, somewhat than bearing the expense themselves. Bona fide , who also serves as president of Bangkok Airways, disclosed that the training cost for each pilot begins at 2.5 million baht.
He confirmed that Bangkok Airways would not implement this scheme. However, he suggested that different airways considering a fleet change might need to consider this method due to the high costs of absorbing coaching expenses for all pilots..