Higher fares on the cards from budget carriers after airport move
Local low-cost airlines may have to increase fares after they move to Suvarnabhumi Airport as operational costs will be as much as 30 per cent higher than at Don Muang.
Thai AirAsia, One-Two-Go and Nok Air all said they were considering increasing ticket prices as well as other options, like surcharges. The airlines said that on top of rising fuel prices, they faced higher charges at the new airport, including hikes in landing fees, parking fees, and ground-service charges. Industry experts estimate that low-cost airline operational costs will increase by between 15 to 30 per cent. Arak Choltharnond, executive chairman of Thai AirAsia Co, said the company would adjust airfares by the end of this year. The company is also considering an increase in the fuel surcharge. "Budget airlines, I believe, will incur higher operational costs at the new airport than at Bangkok International Airport [Don Muang]," Arak said. He added they also had to invest more to accommodate the increase in flights at Suvarnabhumi. Airports of Thailand Plc (AOT) earlier planned to increase the international passenger service charge from Bt500 per person to Bt700. The domestic-flight levy was to rise from Bt50 to between Bt100 and Bt150. However, AOT said it would increase airport taxes in February 2007 and not October this year, as initially planned. Arak explained the airline would spend between Bt20 million and Bt30 million on offices and computer systems and human resources for the new airport. A similar amount was invested when it commenced operations at Don Muang. "We are facing higher costs with the opening of Suvarnabhumi Airport," he said. Udom Tantiprasongchai, chief executive officer of One-Two-Go, said the airline was considering a fare hike or a higher surcharge to cover the rise in fuel prices. Like the others, Nok Air, the sister airline of national carrier Thai Airways International Plc, is also reviewing operational costs. All the budget airlines have gradually increased surcharges as fuel steadily become more expensive. This year, Nok Air and One-Two-Go spent money on improved facilities at Don Muang after they were told they could continue flying out of the airport. They were then informed that was no longer an option and they would have to spend again at Suvarnabhumi Airport. AOT projected it would inject an additional Bt100 million to expand space at the low-cost terminal at Suvarnabhumi to cope with the rapidly-rising demand for those carriers.
Suchat Sritama
The Nation
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