While Thai will never be able to match AirAsia’s costs structure, it needs to close the gap to be competitive. Thai recognises its costs are still too high despite years of reduction efforts. Thai has seen LCCs steadily expand their share of Thailand’s market at the expense of Thai but has still not done nearly enough to try to combat this trend.

LCCs have expanded over the last decade from essentially zero to penetrating almost 30% of Thailand’s total market. LCCs in 2012 accounted for 51% of domestic seat capacity in Thailand and 16% of international seat capacity, according to OAG data. LCCs in the year ending 30-Sep-2012 accounted for 28% of passengers at major airports in Thailand, including about 50% of domestic passengers and about 16% of international passengers, according to Airports of Thailand data.

LCCs over the last four years have doubled their traffic at Thailand’s main airports to over 20 million passengers, including 13.5 million domestic passengers and 6.9 million international passengers. The rate of LCC growth has been equal in both the domestic and international markets, sandwiching market leader Thai Airways. Read More

The number of Chinese tourists visiting Thailand increased 140 per cent in this year’s first quarter year-on-year as a result of the availability of more flight routes, according to Thai AirAsia Chief Executive Tassapol Bijleveld.

He said the number of Chinese tourists travelling by air in Q1 increased 97 per cent compared to the same period last year, counting for over 850,000 persons, of whom 80 per cent were Thai AirAsia’s passengers. The airline served over 1.1 million Chinese tourists entering Thailand last year, Mr Tassapol said.

The number of Chinese tourists visiting Thailand increased 140 per cent in this year’s first quarter year-on-year

As a result, it aims to attract five million Chinese travellers in the next five years, while preparing an expanding business plan as well as opening new routes and having a new Airbus fleet. The executive said there are increasing numbers of young Chinese travellers visiting Thailand with high spending behaviour.