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Bangkok Airways intensifies race on Vientiane route

Posted by Nuttapon_S On December - 10 - 2012 ADD COMMENTS

VIENTIANE : The Bangkok-Vientiane air route is witnessing a growing contest as Bangkok Airways started operating in the sector for which Laotian authorities are reluctant to grant traffic rights to international carriers.

The Thai carrier became the fourth airline to serve the city-pairs, fuelling competition in the marketplace already present by Thai Airways International, state-owned Lao Airlines and privately owned Lao Central Airlines.

Bangkok Airways commenced a daily service between the two capitals on Nov 30, using Airbus 319, a single-aisle jet configured with 12 seats in the business class and 108 seats in the economy.

The route has shown promising traffic potential as Laos has begun to open its doors for foreign investors, businessmen and tourists, many of whom enter Laos from Bangkok, the region’s largest air hub.

The so-called open-door policy came ahead of the implementation of the Asean Economic Community (AEC) in 2016.

It took more than a year for Bangkok Airways to receive the traffic right because Laotian officials were wary of granting new licences to foreign carriers for fear of hurting state-owned airlines, according to industry executives.

Bangkok-Vientiane is perceived as a major international trunk route both for Lao Airlines and Lao Central Airlines, a new player in the fledgling industry.

Laotian authorities have been reluctant for years to grant Thai AirAsia, a unit of Asia’s largest low-cost carrier, the permission to operate on the route.

Thai AirAsia’s low-fare and aggressive strategies have been perceived as a threat to Laos’ own airlines which are attempting to establish themselves with the acquisition of more aircraft and network expansion, industry executives said.

A normal average round-trip fare between Bangkok and Vientiane charged by current operators is around 12,000 baht. The flight takes about one hour.

While Wattay International Airport in Vientiane remained shut for Thai AirAsia, the no-frills carrier has been using the Thai Northeastern city of Udon Thani across the Mekong River as an entry point to the sleepy Laotian capital.

On the Bangkok-Vientiane sector, Lao Airlines offer two daily flights with A320 jet, Lao Central Airlines with a daily flight on Boeing 737-400, and Thai Airways with two flights a day with B737-400.

Bangkok Airways’ access to Vientiane was due partly to the fact that the airline has been operating between Bangkok and Luang Prabang, the former Laotian royal capital and a Unesco World Heritage Site, since October 2002.

Bangkok Airways president Puttipong Prasarttong-Osoth said the service would enhance the airline’s flight connections in Asean.

The launch supports its strategy to become a regional airline of choice and to serve the growing air transport demand between Thailand and Laos after the AEC is formed, he added.

The airline expects more than 60% in seat factor on the route, compared to 68% on its Bangkok-Luang Prabang route, operated by ATR-72 turboprops.

It targets a mix of corporate and leisure passengers on the new service, mainly international travellers on connecting flights from medium- and long-haul routes particularly from its code-share and partner airlines.

“We expect our airline partners to feed a lot of passenger traffic to our Vientiane route,” noted Nandhika Varavarn, Bangkok Airways’ corporate communication vice-president.

Bangkok Airways has 10 code-share partners including Etihad, SilkAir, Malaysia Airlines, Air France, KLM, EVA Air and, more recently, Japan Airlines.

If demand warrants it, the airline may ramp up its Bangkok-Vientiane frequencies to 10 flights a week, she added.