Thailand’s aviation faces competition
BANGKOK, 15 July 2013: Kasikorn Research Centre says Thailand’s airlines will face the critical challenge of air route liberalisation as the ASEAN Economic Community era becomes a reality in December 2015.
The centre said the liberalisation in ASEAN countries is clearly linked to aviation as AEC allows airlines the freedom to serve all capital cities in the 10-country region without flight restrictions. This will put additional pressure on airports.
Thai aviation business has been upbeat since early this year, given that domestic and international passenger traffic at Suvarnabhumi Airport and Don Mueang Airport surged 17.5% to 28.51 million during the first five months this year, against a historic high of 53 million passenger movements throughout 2012 for Suvarnabhumi Airport alone.
“This momentum will continue into the second half of the year as the industry moves toward the ASEAN single aviation market. AEC will encourage regional tourism markets to grow and competition between low-cost airlines across the Asia-Pacific region,” the centre said.
It projected that 2013 passenger traffic at the country prime and secondary ports of entry (POE) airports such as Suvarnabhumi and Don Mueang, will reach between 65.2 to 70.0 million in passengers, an increase of 11% to 18% year on year.
ASEAN governments will also fortify their air traffic potential regionally to improve trade and investment, which would include transportation infrastructure as well as modern airports to attract international flights.
Thailand’s Suvarnabhumi Airport, Singapore’s Changi Airport, and Indonesia’s Soekarno-Hatta International Airport are among the world’s top 20 airports (passenger traffic served)
There is room for Thailand to improve its airports to match Singapore the centre said. Thailand has similar goals to Singapore in becoming the ASEAN aviation hub.
The centre said: “We have quite similar international air routes connecting us with the world as well as ASEAN. However, Thailand has an advantage having more flights connecting Cambodia, Laos, Myanmar and Vietnam. They will be the region’s magnets for fast-growing trade, investment and tourism with over 123 more flights a week to Mekong Region countries than Singapore.”
However, Thailand’s airport facilities remain inferior to Singapore, the centre said pointing to a ranking of 33rd against Singapore’s first place ranking in the World Economic Forum ratings in 2012.
The centre suggested Thailand’s aviation should improve infrastructure include land connections between Suvarnabhumi and Don Mueang to boost competitiveness with its ASEAN peers.
Kasikorn Research Centre is a subsidiary company of Kasikorn Bank, which conducts tourism and business research mainly on Thailand’s economy including tourism with reliable recommendations and indicators on business prospects.