AOT incentives draw lukewarm response
Reduced fees only attract two carriers
Attempts by Airports of Thailand Plc (AoT) to attract scheduled international air traffic to its four provincial airports have received a lukewarm response from airlines, many of which simply cannot find enough passengers to justify the routes.
Only two carriers, Korean Airlines and Bangkok Airways, have taken up the incentives, which include hefty reductions in landing fees.
On Oct 29, Korean Airlines launched four Boeing 747 flights a week between Chiang Mai and Incheon, while on Nov 1 Bangkok Airways inaugurated one-way Chiang Mai-Siem Reap services on Thursdays and Saturdays using an ATR-72 turboprop, according to a senior AoT official.
On Nov 1, AoT began to offer discounts of up to 95% discount on landing fees at Chiang Mai, Chiang Rai, Phuket and Hat Yai airports to stimulate traffic volume. The reduced fees are aimed at luring new carriers to operate through the four airports and encouraging those already operating to increase flights.
Several airlines are reluctant to take the offer because potential traffic demand through the four airports is limited, while others want to see ground handling costs, navigation fees and passenger service charges reduced.
An Indonesian budget carrier has been asking AoT and other Thai agencies to reduce those costs so that it can introduce flights from Medan to Hat Yai, which AoT has been trying to promote.
The AoT official acknowledged that the cut in landing fees may not be enough to attract new business. The company is considering a cut in passenger service charges from the current level of 700 baht per person, which is applied universally at all AoT-operated airports.
AoT's landing fee discounts vary in accordance with different criteria: FA 95% reduction is offered for a carrier that operates more than one weekly scheduled flight through AoT airports to a new overseas destination.
- 75% to an airline that operates one weekly scheduled flight from AoT airports to a new overseas destination.
- 50% to new airlines that offer one weekly scheduled flight on routes already linked by AoT airports and overseas ports.
- 75% to new carriers that offer more than one weekly flight on a route already established by AoT airports and an overseas port.
- 50% to an existing airline that increases the scheduled flight frequency by once a week on routes it is serving.
- 75% to an existing airline that boosts scheduled flight frequency by more than once a week on a route it is operating.
The lower fees apply only to incremental flights in the last two cases.
Based on the same conditions, a 30% discount is given for domestic flights.
While the discounts are offered throughout the year at Chiang Mai, Hat Yai and Chiang Rai airports, the concession applies only for summer flights (April-October) for Phuket airport, AoT's busiest provincial facility.
Source: Bangkok Post by Boonsong Kositchotethana
Monday December 24, 2007