Thai AirAsia marks decade of success

Corporate February 25, 2014 00:00

By Bamrung Amnatcharoenrit
The N

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Airline aims to have served more than 100m passengers by 2024

Thai AirAsia, the country’s biggest low-cost carrier, has served 50 million passengers in its first 10 years, and plans to more than double that number over the next decade. It also plans to have 61 aircraft in its fleet by 2017.
It projects adding between 2 million and 3 million passengers annually. This year, it projects 13.3 million, up from 10.3 million in 2013, said chief executive officer Tassapon Bijleveld.
Meanwhile, he insisted that his company was not involved in the current political chaos, which now is strongly opposing Shinawatra-controlled businesses. The company bought back all of its shares in Shin Corp in 2007, a company founded by the Shinawatra family. He also confirmed that all of Thai AirAsia’s shareholders were genuine, and not nominees.
In its early years, the firm kept its operation alive by getting big loans from banks and later floated an initial public offering. The funds raised were aimed at repaying debt.
“As for the current political tension, we have to … be strong like a pine tree and move with the changing winds.” He acknowledged that the chaos had had an impact on Thai AirAsia’s operations and the country’s tourism scene, but at the current level the company could manage. 
Tassapon is confident in securing the carrier’s leading role in the low-cost market over the next decade. Even as the number of new players rises, rivals will find it even harder to find a niche, not only in Thailand, but also regionally. Given growing competition, some of them may face stagnation and also downsize their operations to survive. Pricing strategy will be a key to success in this segment, intensifying over the next two years. 
He said the firm had a competitive advantage over its rivals, and not just in terms of low ticket prices. The carrier also has a broad network and uses provincial hubs to fly regionally, enabling it to avoid Bangkok. 
Speaking yesterday at a press conference to mark the airline’s 10th anniversary, he said the carrier had witnessed significant growth through the past decade, although it faced barriers from political tension, rising fuel prices and stronger competition.
Over the next decade, Tassapon said the firm would put more focus on developing technology. Technological innovation and the Internet will play rising roles in the check-in system at a time when airport facilities are quite limited. 
Three years ago, 12-13 per cent of Thai AirAsia passengers checked in via its website, self-check-in kiosks, and mobile phones. That number is expected to be on the rise in the future because of limited facilities at Don Mueang International Airport, where the carrier is based. 
The firm has four aircraft in its provincial bases, contributing 10 per cent of seat capacity. Over the next three years, it intends to increase this proportion to 30 per cent.
This year, the firm projects an 83-per-cent load factor, similar to 2013. In the remaining months of the year, six new aircraft are to be delivered, boosting the fleet to 43.