Outrage over budget airline

Outrage over budget airline - Straits Times, November 18, 2003
Long a sacred cow that proud Thais were taught to support, Thai Airways, as well as other recent start-ups, are being sidelined as Thaksin forms a new airline: ...'This is unacceptable, it's tantamount to sabotage,' said Mr Udom Tantiprasongchai, president of low-cost Orient Thai Airlines which is at risk of being swept aside by AirAsia. 'It's a farce - no other country in the world would invite foreign airlines to operate domestic routes. The air traffic rights should be preserved for local operators,' he told AFP. ...Thai Airways, criticised by Mr Thaksin as lumbering and slow to innovate, is also planning to enter the budget airline business with Sky Asia.


[2015 note: Like many newspaper articles from the earlier days of the internet, this article is no longer online. Below is the complete text of the original article.]

Showdown over Thai skies
Thai carriers gear up for a fight as budget AirAsia threatens to undercut them

AFP, November 18, 2003

BANGKOK - The launch of budget carrier AirAsia, half-owned by the family firm of Thai Prime Minister Thaksin Shinawatra, has sparked a storm of controversy and criticism it will undercut national carrier Thai Airways.

The national carrier is about to make a major share offering, and AirAsia announced last week that from January, it will begin flying to popular Thai destinations, including the northern city of Chiang Mai and the holiday resort of Phuket, at half the fare charged by beleaguered Thai Airways.

Shin Corp, the telecoms empire which made Mr Thaksin a billionaire before he went into politics and transferred control to his family, will own 51 per cent of AirAsia Aviation, in partnership with Malaysian low-cost carrier AirAsia.

Pro-democracy activists, competing airlines and aviation analysts are alarmed at the prospect of a carrier with close links to the Prime Minister competing directly with Thai Airways, which stands to be the big loser.

"This is unacceptable, tantamount to sabotage" said Mr Udom Tantiprasongchai, president of low-cost Orient Thai Airlines which is at risk of being swept aside by AirAsia.

"It's a farce - no other country in the world would invite foreign airlines to operate domestic routes. The air traffic rights should be preserved for local operators," he told AFP.

The announcement by AirAsia last week came ahead of an offering of 385 million Thai Airways shares, which will reduce the level of government ownership from 93 per cent to 70 per cent.

"It could lead to less interest from investors... even if right now Thai is quite a profitable company," said an independent aviation analyst in Bangkok after the airline announced a 22 per cent increase in annual profit on Friday.

The Malaysian arm of AirAsia, which is following in the footsteps of successful European budget operators EasyJet and Ryanair, has dismissed as "irrelevant" the links to Mr Thaksin.

Spurred into action by the new threat, Orient Thai plans flights between Bangkok and Chiang Mai from December at 999 baht, one baht lower than AirAsia and half that of Thai Airways.

"I am ready to fight and will directly position my business to confront AirAsia by operating flights on the same routes," said Mr Udom, whose airline has operated for a decade, mostly in the charter business.

Thai Airways, criticised by Mr Thaksin as lumbering and slow to innovate, is also planning to enter the budget airline business with Sky Asia.

Flights are set to start in April on the lucrative routes from Bangkok to Chiang Mai and Phuket. -- AFP
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