Thailand’s Domestic Airlines to Cut Prices 20% in January 2023

The Airlines Association of Thailand (AAT) has agreed to launch promotional campaigns offering domestic air fare discounts of up to 20% beginning in January in response to the government’s call for lower air fares.

According to informed airline sources, the AAT’s seven founding members recently met to discuss air fare reductions in order to encourage more people to travel by air while promoting local tourism.

The Thai Finance Ministry recently reduced the excise tax on aviation fuel to help absorb some of the operational costs of domestic airlines.

Businesses in Phuket are reportedly asking domestic airlines to increase flights during the holiday season to accommodate an increasing number of passengers. They also asked the government to persuade airlines to reduce their unrealistically high airfares.

Bangkok Airways, Thai Air Asia, Thai Air Asia X, Thai Smile Airways, Nok Air, Thai Lion Air, and Thai Vietjet founded the AAT earlier this year.

Airlines from China

According to the Association of Thai Travel Agents (ATTA), Chinese visitors could reach 3-5 million next year if travel restrictions are lifted, but travel agents on the mainland are still struggling with preparations.

ATTA president Sisdivachr Cheewarattanaporn said many Chinese travel agents are preparing to resume operations after Beijing eased some Covid-19 restrictions, such as reducing quarantine days for inbound arrivals and eliminating Covid-19 testing centers.

According to Mr. Sisdivachr, a number of workers in China have left the tourism industry to pursue other opportunities. Normal operations will take some time to resume. Furthermore, despite the fact that Covid-19 has been declared endemic in Thailand, outbound tour operators in China remain concerned, he said.

According to Mr. Adith Chairattananon, honorary secretary-general of ATTA, China’s strict travel restrictions have impacted over 100 million workers in the tourism industry. Another challenge is that most Chinese people are still concerned about Covid-19, according to Mr. Adith.

He said there were long lines of people waiting to buy medicines at pharmacies, despite the government’s efforts to convince the public that the disease does not cause severe symptoms.

“Right now, only a small percentage of them are confident enough to travel,” Mr. Sisdivachr said. He stated that Thailand should plan ahead of time for its tourism supply chain, which includes workers, tourist attractions, and airlines flight capacity.

Thailand’s Tourism Authority previously predicted that some Chinese would begin to travel during the Lunar New Year in January.

Mr. Sisdivachr, on the other hand, believes that scenario is unlikely because China’s entry policy will not be clarified until the Two Sessions meeting in March. According to him, the relaxation of Covid-19 measures in Hong Kong has attracted Chinese tourists and paved the way for them to fly to Thailand as well.

Arrival of Chinese tourists in Thailand

Mr. Sisdivachr urged the authorities to assist in increasing seat capacity to Thailand, the most important factor, and to launch aggressive marketing campaigns to accommodate Chinese tourists next year.

According to a recent survey conducted by ITB China, a business-to-business trade show, more than 65% of buyers believe the Chinese outbound market can recover within a year of reopening. Approximately 32% of them predicted a six-month recovery.

The survey also revealed two significant behavioral trends: the expectation of sanitary and public health measures to control virus outbreaks, as well as price promotions.

According to Dragon Trail Research, Thailand is one of the top five destinations on the wish lists of Chinese travelers.

Thailand’s economy may accelerate next year and reach the 3.8% growth target if China’s reopening plans to offset slowing global demand are successful, the finance minister said on Tuesday.

Growth in Southeast Asia’s second-largest economy has lagged behind that of its peers, owing to the tourism sector’s slow recovery from the coronavirus pandemic. Prior to the pandemic, Chinese tourists accounted for approximately 28% of nearly 40 million foreign tourist arrivals.

Mr. Arkhom Termpittayapaisith forecasted 3.1% or 3.2% economic growth in 2022.

“But we are still optimistic and hoping for 3.8% (growth) next year, with tourism being the main driver,” he said at a news conference, adding that there were signs that China would begin to reopen.

Last month, Arkhom warned that the 2023 growth forecast could be missed due to the global economic slowdown.

He stated that Thailand has received 11 million foreign tourists so far this year, with the figure expected to rise to 21 million by 2023, or even higher if Chinese tourists return.