Home' Asian Aviation : AAV_Sept 2012 Contents AsianAviation | SEPTEMBER 2012 15
high," said non-LCC Bangkok Airways's president,
But there is another problem woven into this.
LCCs are increasingly offering a range of legacy-
type frills - albeit with the passenger paying for it.
Legacy carriers, meanwhile, are adopting some
As a result it becomes harder to distinguish
between different offerings, making it imperative
to have a brand identity. This is a competitive fluid
market where branding like other services is a
hard sell. "We have to build the brand awareness,"
One factor affecting the situation in Thailand is
a recent decision by THAI, the national carrier, to
step back from involvement with LCC Nok, a Thai
domestic carrier in whom it has a 49% stake. This
was seen as the first sign of consolidation by some
in the market.
The reality is more ambiguous. "THAI's Board of
Directors directed the Company to slow down plans
of the ultra low cost carriers and focus on Thai and
Thai Smile for the time being," an official within THAI
told Asian Aviation. It's a very typical Thai feint leaving
all doors open and all bases covered.
Rationalisation may take some time, however.
"THAI, THAI Smile, Bangkok Airways, Thai AirAsia
and Nok will do well in the next five years... Orient
Thai and others will struggle a little," was the view of
one THAI official.
THAI had taken up the idea of involvement with
LCCs not just as part of region-wide move towards
national carriers becoming multi-brand airline groups
but because its recent, now ousted, President and
CEO Dr Piyasvasti Amranand was very interested
in the potential LCC's offered. They have, he said
recently, "huge capacity."
Piyasvasti acknowledged the competition made
life for national carriers tougher, but as he pointed
out the lack of THAI's involvement in Thai Tiger lost
it a chunk of the business it generated. He was the
mover and shaker behind THAI's involvement in the
ultra low cost carrier plan. The real impact of LCCs
in Thailand might not be so much on each other but,
rather how they push forward a reconfiguration of the
The Philippines is another a big LCC
emerging market but the situation is different
to that found in Thailand.
The tourist market has yet to take off but
the archipelago nature of the Philippines as
well as its position as a massive exporter of
labour mean the need for airline services
is well established. This plus problems with
national carrier Philippine Airlines have
created a different opportunity for LCCs
"The potential for growth in our aviation
and tourism industry is tremendous," Maan
Hontiveros, President and CEO of AirAsia
Philippines said recently. "The growth
will come from the LCCs and therefore
the government needs to ensure a proper
business environment and a level playing
field for all low-cost carriers."
Maan Hontiveros s argument is the
affordable fares the LCCs offer have
grown demand allowing new markets to
be tapped. This includes small businesses,
domestic tourists and family members of
OFW (overseas Filipino workers) going to
see the provider rather than the provider
Where it becomes harder to stick
with Maan Hontiveros s view is in the
development of the next level - the
international tourist market.
"Our beaches and resorts in Boracay,
Puerto Princesa, Davao and all parts of the
islands are now within reach of visitors from
ASEAN (Association of Southeast Asian
Nations), Australia, Hong Kong, Macau and
China, Korea and Japan through Clark,"
Maan Honitiveros said.
True. But its not just LCCs which make for
a tourist industry: its reputation, safety, food,
ease, nightlife, hotels, connectivity. The LCCs
in the Philippines help it but they cannot
move it beyond its own limits.
-- Michael Mackey
"THAI, THAI Smile, Bangkok Airways,
Thai AirAsia and Nok will do well in
the next five years... Orient Thai
and others will struggle a little,"
THAI Airways official
Nok Air 737-300
BOEING SHANGHAI AVIATION SERVICES
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