Thai Airways International PCL (Thai) plans to hand over its flight route to Cambodia to its wholly-owned subsidiary Thai Smile Airways amid fierce competition in the low-cost airline sector, its president Sumeth Damrongchaitham said on Monday.
In an interview with Thailand’s the Nation, he said Thai is considering cancelling six flight routes to four Indochina countries – Cambodia, Laos, Vietnam and Myanmar.
The routes, which all emanate from Bangkok’s Suvarnabhumi Airport, are to Phnom Penh, Vientiane, Luang Prabang, Hanoi, Ho Chi Minh and Yangon.
“These routes are all covered by a small number of flights and have low customer capacity. Once the cancellation plan is finalised, Thai will assign Thai Smile Airways to cover these routes instead,” he said.
Sumeth said the move comes as rising competition leads airlines to drop prices to stay ahead of their rivals. He said: “Thai needs to adjust its strategies too, to preserve our reservation rate. We will focus on rolling out promotional campaigns until year-end.”
Cambodia Airports SCA communications and public relations director Khek Norinda told The Post on Monday: “It is not unusual for major airliners to operate regional short and medium flights or routes through their subsidiary carriers and better cater to passengers [especially in terms of prices] and streamline costs,” he said.
Cambodia Airports is a French-Malaysian joint venture that operates the Kingdom’s three international airports – Phnom Penh International Airport, Siem Reap International Airport and Sihanoukville International Airport.
Ministry of Tourism spokesman Top Sopheak said the move was strategic on the two firms’ part and would not have serious repercussions on the Kingdom’s aviation market.
“Thai Smile Airways and Thai are allowed to transfer [flight routes] between each other – it won’t have a serious negative impact on our industry,” he said.
Cambodia Association of Travel Agents adviser Hor Vandy said the firm’s strategy had to change due to competition growing steeper. “The strategy is to maintain competitive pricing in the market, which has gotten more intense.”
He said the Kingdom’s aviation market has made significant strides. “In the past, we had barely more than 10 carriers, but now we have more than 40 firms. Air transport investment has seen very strong progress,” he said.
The ministry’s data shows that in the first eight months of this year, Cambodia received a total of 4.36 million tourists, an increase of 10.4 per cent compared to the same period of last year. Of that, 234,451 were Thais – an increase of 11.2 per cent year-on-year.