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Thai Smile slashes 2014 revenue forecast by 20 per cent

Thai Smile, a unit of Thai Airways International, has lowered its revenue target for this year because of the political crisis and a big drop in tourist arrivals.

The airline has set a new target of Bt8 billion, after initially projecting Bt10 billion, or a 20-per-cent drop. It reported revenue of Bt10 billion in 2013.

"Key factors for the drop are the political crisis in Thailand and a continued big decline in tourist arrivals since the coup on May 22," Thai Smile chief executive Woranate Laprabang said. Thai Smile flies to eight destinations in the country and nine overseas.

Woranate said revenue should significantly increase after the airline moves some operations from Suvarnabhumi Airport to Don Mueang International on August 8.

Thai Smile expects to have a 20 per cent share of the passenger traffic at Don Mueang, which is dominated by AirAsia.

It expects nearly 20 million passengers to travel in and out of Don Mueang this year. Of that figure, 12 million are passengers of Thai AirAsia, 6 million use Nok Air and the rest use other airlines.

Starting from August 8, Thai Smile will operate from Don Mueang to Phuket, Khon Kaen and Chiang Mai, totalling eight flights a day.

It is also set to add more routes from Don Mueang, such as to Macau and Mandalay, when all its operations are moved to the airport by October 26.

The airline will make investments at Don Mueang including a passenger lounge and online sales distribution.

Thai Smile will return some flights to Thai Airways International such as its Hyderabad and New Delhi because of a high number of connecting passengers. Those routes remain at Suvarnabhumi.

Santisuk Klongchaiya, Thai AirAsia Co commercial director, said the airline had lowered its passenger projection this year from 13.2 million to 12.6 million and its average load factor from 83 per cent to 80 per cent.

Santisuk said Thai AirAsia was preparing a new campaign, which was expected to be launched soon, to compete with Thai Smile. One of the packages would be a low fare plus a rental car.

"We are confident of remaining the biggest low-cost carrier and offering the lowest fares despite having a new player," he said.

At Don Mueang, Thai AirAsia has the biggest network with 75 daily overseas flights and 45 daily domestic flights.


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