Don Mueang airport set to lead the region for budget-carrier connectivity
Bangkok's Don Mueang International Airport will become the best in the region for connectivity for low-cost carriers (LCCs) when it resumes full operations this year, according to the head of the largest budget carrier in Southeast Asia.
“The world is talking about the Asean Economic Community and the open sky here. There are much larger pies [in prospect], but the private sector is set to drive the region. I’m not afraid of competition because I believe that consumers should have choices, and I’m a marketer who says everyone can fly,” said Tony Fernandes, founder and group chief executive officer of Malaysia-based AirAsia.
More than 200 million people have already flown with AirAsia, and about half of them were first-time fliers, he said.
Fernandes said he believed Don Mueang International Airport offered the best air connectivity in the region, especially for LCCs.
Although many countries in the region – Indonesia, the Philippines, Vietnam, Malaysia and Thailand – have in recent times stated intentions to have specific LCC terminals, it seems that only Bangkok is likely to achieve the mission, he said.
In 2007, the Malaysian government announced plans to develop Kuala Lumpur International Airport into the world’s biggest LCC hub. However, the purpose-built LCC terminal is no longer in service for budget carriers, and is now used for other purposes, he said. Bangkok is now the biggest base for AirAsia Group in terms of passenger numbers and growth, he added.
Airports of Thailand (AOT), which operates six international airports in the Kingdom, has scheduled the resumption of full operations at Don Mueang this year after the completion of a major renovation worth Bt3.2 billion aimed at increasing capacity at the airport from 18 million to 30 million passengers per year.
AOT is also planning to expand Suvarnabhumi Airport in a bid to increase the current capacity of 45 million people per year to 60 million.
The Bt62-billion expansion projects at Suvarnabhumi will cope with passenger congestion and the continuously increasing number of flights, and will take six years to complete.
In 2012, AirAsia Group – comprising AirAsia, Thai AirAsia and Indonesia AirAsia – moved its Thai operations from Suvarnabhumi Airport to Don Mueang.
Currently, more than 15 airlines, including Nok Air, Thai Lion Air and THAI Smile Airways, base their operations at Don Mueang.
V Air is the latest budget airline to use the airport, for its Bangkok-Taipei route, which commenced operations on December 17.
Patee Sarasin, chief executive officer of Nok Air, said his budget carrier was confident of achieving its passenger target of 8 million for last year, up from 6 million in 2013, after relocating operations to Don Mueang.
However, net profit is expected to fall from more than Bt1 billion to between Bt300 million and Bt400 million because of tough competition.
Nok Air has nevertheless ordered 15 new aircraft, two of which are scheduled to arrive this year, he said.
The International Air Transport Association (IATA), meanwhile, said global gross domestic product was now expected to grow by 3.2 per cent this year, against an estimated 2.6 per cent in 2014.
This would be the first time that global GDP growth had surpassed 3 per cent since 2010, when economic growth hit 4.1 per cent in a post-recession bounce-back, whereas this time around it would be boosted by the fall in oil prices, said the association.
Given such a projection, the outlook for the airline industry is improving, said IATA, with passenger traffic expected to grow by 7 per cent this year – well above the 5.5-per-cent growth trend of the past two decades.
Airlines in the Asia-Pacific region are expected to achieve an overall net profit this year, thanks to lower fuel costs, it added.
