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AOT looks to shift low-cost carriers

BackSep 03, 2007

Airports of Thailand (AOT) will soon propose to the revenue subcommittee the plan to reopen Don Mueang as an international airport for low-cost airlines, as part of its plan to raise revenue.

"We have discussed the reopening issue with low-cost airlines and they agreed to the plan," said Kulya Pakakrong, acting president of the company, which operates five international airports and Don Mueang.

Sources at Suvarnabhumi Airport said that the number of passengers at the main international airport this year would reach 42 million, which is close to its maximum capacity of 45 million, even though some flights have been moved to Don Mueang.

Kulya said she was confident low-cost airlines would love to move to Don Mueang even though it would not provide connecting flights and would charge the same fees as Suvarnabhumi.

"What low-cost airlines want is minimum turnaround time. At Don Mueang, they can operate with fewer officers, it is faster to check in, the runways are shorter, and it is more accessible than Suvarnabhumi. Overall, it should reduce their operating cost and they should not mind the fees," she said.

If the plan is approved, the International Terminal 1 will be reopened.

Meanwhile, AOT is reviewing the use of commercial space at Don Mueang and four international airports in Phuket, Hat Yai, Chiang Mai and Chiang Rai as it bids to increase revenue from this area to 45 per cent of the total in 2010, up from 37 per cent currently. Its other revenue source is the aeronautical business, mainly parking and landing fees.

Shops at these airports will be regrouped according to a new zoning policy, under the supervision of a Thammasat University team. AOT is also considering what outlets should be added to please travellers, such as of popular coffee and fast-food chains. Though this would mean lower rents for AOT due to the popularity of the brands, these outlets could draw more travellers. Now that AOT's commercial revenue derives from rents and a share of sales, it would eventually earn more, Kulya said.

Giving priority to travellers' convenience, AOT is also reviewing contracts with limousine-service operators at the provincial airports. So far the contracts have been renewed without any assessment of the service provided. It has also opened the commercial space to any operator who can afford the fixed rental rate.

"Unlike at Suvarnabhumi, any bank that can pay the rent can put up their ATM or foreign-exchange booths anywhere they like," Kulya said.

Other plans include giving permission to put up billboards along the roads to passenger terminals, which should raise about Bt100 million annually, and turning 1,000 rai into a hotel and shopping complex.

Kulya said that once the legal dispute with King Power International Group was settled, AOT should receive more income from the duty-free shop business. So far, income of about Bt1.5 billion has been parked with the Civil Court.

"Then, our aeronautical and commercial revenue ratio could be 50:50," she said.


Source: The Nation by Achara Deboonme
Monday September 03, 2007