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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Turbulence will hurt Southeast Asia’s airlines in 2017 as overcapacity bites
Southeast Asia is a region with enormous growth potential but a relatively cloudy outlook for airlines given the intense competition and overcapacity concerns. Demand is on the rise, boosted by a growing middle class, rising discretionary incomes and relatively strong economies.
Southeast Asia aviation outlook: passenger growth accelerates, led by Vietnam, Myanmar and Malaysia
Southeast Asia’s aviation market recorded healthy growth in 2016, with passenger traffic expanding faster than the global average across nearly every country in the region. Six of Southeast Asia’s 10 countries had growth in or near the double digits, led by Vietnam and Myanmar. Seven countries had growth equal to, or higher than, in 2015.
Southeast Asia should continue to experience rapid growth in 2017 and beyond. Vietnam and Myanmar will likely again lead the pack in 2017, joined by Malaysia. The Philippines should experience growth of approximately 10% for the third consecutive year, also putting it towards the top of the pack.
However, overcapacity remains a long term concern, pressuring yields and profitability. The average profit margin of the Southeast Asian airline sector significantly lagged the global average in 2016, and this trend will likely continue in 2017.