Bangkok Airways is reportedly studying the feasibility of launching its own LCC in order to access the growing market, according to a report in The Nation. The LCC would reportedly follow the European low-cost concept and operate regionally to destinations within three to four hours range. Bangkok Airways president Puttipong Prasarttong-Osoth said if the airline does not enter the low-cost segment it will lose its market share, especially after the implementation of the ASEAN Economic Community (AEC) in 2015. The company is yet to make a decision on the proposed venture as it is currently preparing to list on the Stock Exchange of Thailand in 1Q2013. The THB10 billion (USD320 million) expected to be raised from its IPO will go to modernising its infrastructure at Bangkok Suvarnabhumi Airport and expanding its network and fleet from 19 presently to 30 aircraft in 2015. After the listing it will finalise its expansion plan.
Bangkok Airways studying feasibility of launching own LCC: report
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Thai VietJet Air Part 2: international expansion will be challenging for VietJet’s new JV
Thai VietJet Air has launched scheduled services with two domestic routes and flights to neighbouring Vietnam, the home market of its parent. The start-up, which is 49% owned by the VietJet Group, is considering the addition of several domestic and international routes in the coming months as it is allocated more A320s from VietJet’s 200 aircraft-strong order book.
However both domestic and international expansion will be challenging, given the already intense competition in Thailand’s short haul LCC sector. Virtually every market Thai VietJet is evaluating is already served by more established LCCs, and /or is also being targeted by other Thai LCCs.
This is the second half of an analysis report on Thai VietJet Air’s launch of scheduled services and outlook. The first part focused on the new LCC’s prospects in the domestic market. This part examines opportunities for Thai VietJet in Thailand’s international market.
Thai VietJet Air Part 1: Becomes fourth LCC in Thailand’s intensely competitive domestic market
Thai VietJet Air, cross border JV of Vietnam-based VietJet, launched scheduled services on 15-Sep-2016, becoming the fourth LCC in Thailand’s already intensely competitive domestic market. Over the past three years VietJet has faced multiple delays in launching its joint venture in neighbouring Thailand, and will now confront huge challenges in establishing a significant presence on trunk routes.
VietJet will be competing in Thailand against three much more established LCC groups in AirAsia, Lion and Nok. In comparison VietJet has faced relatively limited competition in Vietnam, where it is only one of two LCCs since commencing operations at the end of 2011.
VietJet needs to diversify beyond the Vietnamese market to support its order book, which now includes approximately 200 aircraft, and its growth aspirations. However, Thai VietJet represents a risky project just as the group moves forward with its IPO plans.