Thai Airways Fare Increases Hurt Phuket Tourism
April Fools' Day this year came as a harsh surprise for the islands tourism sector as national flag carrier Thai Airways International hiked fares on the Bangkok to Phuket sector by 46%. Back of mounting losses on fuel increases and corporate earnings that airline action could not have come at a worse time.
While substantial financial losses look to by realized from the recent European volcano debacle and impact from the continued political actions in Bangkok; hotels and service providers are now appealing to the airline to cut pricing.
Perhaps the biggest impact of the increase has been in regular travelers now looking to the LCC's (low cost carriers) such as AirAsia, Nok Air (though this is a Thai Airways subsidiary), One-Two-Go and even boutique airline Bangkok Airways as alternatives.
Despite its well regarded loyalty program Royal Orchid Plus and affiliation to Star Alliance being key drivers, pricing parity has not widened to the point of travelers pushing to other carriers. As we have seen in the hotel sector on the fallout from the economic crises consumers are increasingly cost resistant and look for the best deal.