Thai Lion Air
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Thai Lion Air is a Lion Air Group subsidiary which launched services from its Bangkok Don Mueang hub on 04-Dec-2013 with Boeing 737-900ER equipment. Initial services include domestic routes to Chiang Mai as well as linking with other Lion Air Group hubs in Kuala Lumpur and Jakarta. In 2014 Thai Lion Air plans to expand its network to Singapore, Guangzhou, Hong Kong, Shenzhen, Delhi and Mumbai.
Location of Thai Lion Air main hub (Bangkok Don Mueang International Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Thai Lion Air fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
24 total articles
8 total articles
Lion Air Group’s pace of expansion is about to accelerate as it takes delivery of its first A320 and increases its 737 delivery rate. The group plans to add over 30 aircraft in 2H2014 as it increases its overall average monthly intake from three to five aircraft – a rate it will maintain in 2015, resulting in a staggering 60 deliveries next year.
At the same time AirAsia Group is slowing its fleet expansion, particularly in the Southeast Asia market. AirAsia is growing its Southeast Asian fleet by only six aircraft in 2H2014 and may not add any aircraft in 2015 as the focus will be on spooling up new affiliates in India and Japan.
If Lion does not follow AirAsia in slowing down growth in Southeast Asia it will quickly shoot past AirAsia. There is a risk market share gains will come at the expense of yields and profitability as several Southeast Asian markets are already suffering from overcapacity - but there is a larger strategic game being played out now.
Bangkok Airways is planning to open an ATR 72 turboprop base in Chiang Mai in 4Q2014 which will be used to launch two new routes to Myanmar as well as new domestic sectors.
The new base will be opened as Bangkok Airways starts to transition its ATR 72 fleet from the -500 to new generation -600 model. The carrier is planning to acquire three more ATR 72-600s, adding to its earlier order for six of the type.
The new Chiang Mai to Yangon and Mandalay services will give Bangkok Airways five routes to Myanmar. Bangkok Airways has already become the largest foreign carrier in Myanmar, with three routes and 40 weekly frequencies.
Nok Air and Thai AirAsia profits fall in 1Q but continue rapid growth in response to new competition
Nok Air and Thai AirAsia remained profitable and were able to continue their rapid growth trajectory in 1Q2014 despite difficult market conditions in Thailand. But both low-cost carriers have been impacted by the ongoing civil unrest in Bangkok and intensifying competition as profits dropped significantly.
The Dec-2013 launch of Thai Lion Air and the upcoming launch of Thai VietJet will result in four LCCs competing in a domestic market which continues to grow rapidly but is suffering from over-capacity. With their 10-year head starts, Nok and Thai AirAsia enjoy an important first mover advantage and their continued relatively strong financial performance even in the most challenging of conditions shows they have the muscle to withstand any prolonged battle.
Meanwhile competition between Nok and AirAsia is increasing as both groups launch Bangkok-based long-haul low-cost affiliates. Their establishment of widebody operations well as Thai AirAsia’s expected expansion into the regional sector, where Nok already plays, results in an interesting dynamic.
AirAsia, Nok Air, Bangkok Airways, MAS & soon Finnair drive rapid growth at Thailand’s Krabi Airport
Thailand’s Krabi Airport has recorded rapid growth over the last two years as the beach destination has emerged as a popular alternative to nearby Phuket.
Seat capacity at Krabi has more than doubled since 2012 and increased by more than 70% over the last year, driven by a rapid increase in domestic and international services. The main Krabi-Bangkok market now has four competitors, up from two, while second competitors have entered the main international routes to Kuala Lumpur and Singapore.
Rapid growth at Krabi is expected to continue, driven partially by capacity constraints at Phuket. Finnair has unveiled plans to start operating services to Krabi in Dec-2014, a major breakthrough for Krabi as it represents its first scheduled service outside Asia. Thai AirAsia is also preparing to open a base at Krabi – a first for the airport – as part of a plan to launch services to China.
Thai AirAsia is planning more rapid expansion in 2014 despite the challenging market conditions in Thailand. The carrier aims to grow passenger traffic by 27% in 2014 to 13.3 million as eight A320s are added to its fleet for a total of 43 aircraft.
Thai AirAsia plans to continue growing in both the domestic and international markets with a combination of new routes and additional frequencies. The domestic expansion comes amid increasing competition while the international market expansion comes despite sagging demand due to the civil unrest in Bangkok.
Among all the existing AirAsia short-haul affiliates, Thai AirAsia is pursuing the fastest growth in 2014 and is alone in opting against slowing down fleet expansion. The decision to continue with rapid expansion is strategic as AirAsia seeks to maintain its leading position in Thailand’s low-cost sector as competition increases.
Thai Lion Air is focusing primarily on domestic expansion with a mix of trunk and regional routes. Thai Lion currently operates four domestic routes, three of which were launched in Mar-2014 as the carrier took delivery of two additional 737-900ERs for a total of four and its first ATR 72.
International expansion will take a back seat in response to sagging inbound demand due to the continued civil unrest in Bangkok. But the start-up is experimenting with two regional international routes.
Thai Lion faces intensifying competition and challenging market conditions. But the medium to long-term outlook remains relatively bright as the Thai market should be able to support more LCC capacity, both domestically and internationally.