Thai Lion Air expands domestic network, intensifying competition with Nok, Thai AirAsia & Thai Smile

Thai Lion Air is pursuing further domestic expansion with the new LCC launching four more trunk routes from its Bangkok Don Mueang base. The expansion threatens to exacerbate the overcapacity situation in Thailand's domestic market, which has become unprofitable in 2014 despite continued double digit passenger growth due to intense competition pressuring yields.

Thai Lion, which launched services in Dec-2013, has so far focused almost entirely on the domestic market. By early Oct-2014 Thai Lion will have captured about an 8% share of domestic capacity and be competing on six of Thailand's seven largest domestic routes.

The expansion at Thai Lion comes ahead of the planned launch of Thai VietJet Air, which plans to become the fourth LCC in the domestic market. Thai VietJet's entrance could exacerbate the current overcapacity situation and make it even more difficult for a return to profitability.