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Pragmatism prevails for Bangkok Airways President

Luc Citrinot, eTN  Mar 27, 2011

BERLIN (eTN )- Consolidation of its existing network, careful expansion are the leitmotivs of Bangkok Airways President Puttipong Prasarttong-Osoth. “My main concern is to make sure that Bangkok Airways remains a profitable business in an increasingly competitive environment,” explained the airline’s president in an exclusive interview to eTurboNews.

From this point of view, the former flight captain differs from the more “sentimental” vision of his father, Dr. Prasert Prasarttong-Osoth, still the airline’s CEO. Viewed originally as the airline linking Indochina UNESCO World Heritage sites, as well as a pioneer carrier to Samui Island and Siem Reap/Angkor, Bangkok Airways successfully diversified its strategy over the last three years, following the economic crisis. Its network has been restructured with an increase in frequencies on existing routes.

“We looked again at our entire network system with this simple question: 'how to enhance our own network?.' We then decided to make our Bangkok hub more efficient with increased frequencies to our major destinations to be sure that passengers could connect easily. And we also signed a series of codeshare agreements with airlines such as Etihad Airways, Air France, [and] Eva Air, which helps us selling destinations such as Samui, Phuket, Siem Reap, or Luang Prabang all around the world,” he described.

This strategy is paying off, as Bangkok Airways depends largely on foreign travelers. According to Mr. Prasarttong-Osoth, the Thailand domestic market accounts for only 10% or 15% of total international passengers flow, while on domestic routes, this market share climbs up to 25%.

After venturing a few years ago in China and Japan, Bangkok Airways recently moved into the Indian market. “We see a huge potential for Indian travelers desiring to fly to seaside destinations such as Phuket or Samui but also to Hindu-influenced heritage sites such as Angkor Wat. We recently launched flights from Bangkok to Mumbai, offering easy access via our hub to the rest of Thailand as well as Cambodia,” he added.

South Asia is seen by Bangkok Airways President as one of the most promising markets for its airline. Bangkok Airways has served the Maldives Islands for a couple of years, but the market targeted more Europeans or wealthy Thais looking for an exclusive holiday. Mumbai was added in early March with six weekly frequencies, while Dhaka's (Bangladesh) first flight just took off on March 27 with a daily frequency.

“We [are] look[ing] at serving more routes in India with Delhi or Calcutta being top in our priorities. However, it is difficult to get traffic rights for those airports due to high demand from airlines and their current saturation. Slots are fully used there. But free capacities are still available at airports such as Bangalore or Chennai, which are also markets with a big potential to grow,” told Mr. Prasarttong-Osoth.

Will China, Asia’s largest air market, be back sometime on Bangkok Airways’ agenda? “We already link Hong Kong to Samui, but we still keep an eye on Mainland China to assess which destinations carry the most potential. We used to fly to secondary or leisure destinations such as Shenzhen or Guilin. We could envision serving primary Chinese markets such as Guangzhou or Shanghai and offer easy connections to the Maldives, Samui, or Southern Thailand,” added Bangkok Airways' President. The airline continues to monitor passenger demand in large Southeast Asian markets such as Indonesia, the Philippines, and Vietnam. “We still want to fly in the future to Kuala Lumpur,” told Mr. Prasarttong-Osoth.

Further expansion could, however, be jeopardized by rising oil prices due to the Middle East crisis. “It definitely affects our cost structure, and we [are] closely monitor[ing] how deep it could weigh on the viability of our operations on some routes. Of course, we have to increase our fuel surcharge but it remains always a delicate balance. I am still vowing to adjust the surcharge a little bit, but we can’t pass [the] total entire cost on[to] our passengers without affecting the demand,” said Puttipong Prasarttong-Osoth.

The airline has a very efficient young fleet of ATR 72 and Airbus A319 and A320. The arrival of Airbus A350X from 2015 will help to further save fuel costs with aircraft being put into service on medium-haul regional routes.

Pragmatism prevails for Bangkok Airways President
Photo by Luc Citrinot

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