Thai AirAsia plans rapid domestic and international growth in 2014 despite challenging conditions

Posted on April 15, 2014

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Thai AirAsia is planning more rapid expansion in 2014 despite the challenging market conditions in Thailand. The carrier aims to grow passenger traffic by 27% in 2014 to 13.3 million as eight A320s are added to its fleet for a total of 43 aircraft.

Thai AirAsia plans to continue growing in both the domestic and international markets with a combination of new routes and additional frequencies. The domestic expansion comes amid increasing competition while the international market expansion comes despite sagging demand due to the civil unrest in Bangkok.

Among all the existing AirAsia short-haul affiliates, Thai AirAsia is pursuing the fastest growth in 2014 and is alone in opting against slowing down fleet expansion. The decision to continue with rapid expansion is strategic as AirAsia seeks to maintain its leading position in Thailand’s low-cost sector as competition increases.

Thai AirAsia recorded rapid growth in 2013

Thai AirAsia (TAA) passenger traffic grew 27% in 2013 to 10.5 million as the carrier’s fleet increased from 27 to 35 A320s. Domestic passenger traffic grew by 28% to 6.4 million while international passenger traffic grew by 24% to 4.1 million.

Thai AirAsia passenger traffic: 2013 vs 2012 and 4Q2013 vs 4Q2012

TAA particularly made a domestic push in 4Q2013 as it added two domestic destinations, Khon Kaen and Phitsanulok, giving it 15 destinations in Thailand and 19 domestic routes. The carrier also added at least one daily frequency on six of its 12 existing domestic routes from Bangkok and launched Chiang Mai-Krabi as its fifth point-to-point domestic route.

Khon Kaen was previously only served by Thai Airways/Thai Smile and Phitsanulok was previously only served by Thai Airways LCC affiliate Nok Air. While Nok still has a larger domestic network and has pursued faster domestic growth than TAA over the last two years, TAA was able reassume in 4Q2013 the position of leading LCC in Thailand’s domestic market.

AirAsia is striving to retain or increase in 2014 its 28% share of Thailand’s domestic market as competition intensifies. TAA cannot afford to slow down its domestic expansion if it is to achieve this strategic objective. As CAPA reported in two earlier instalments in this series of analysis reports on the Thai market, TAA’s two main LCC competitors – Nok Air and Thai Lion Air – both plan to focus expansion in 2014 on the domestic market.

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