Does Bangkok Airways dream too big?


BANGKOK, Thailand (eTN) – Bangkok Airways’ 40th anniversary was an opportunity for its founding CEO, Prasert Prasarttong-Osoth, to unveil the future of the airline over the next three years. Bangkok Airways has been growing successfully over the years, transporting 2.42 million passengers in 2007 and making its 12th consecutive profit at US$7.43 million.

Despite a less favorable environment with fuel prices representing now over 35 of the cost of the airline compared to 11 percent just a few years ago, Bangkok Airways remains extremely ambitious. The fleet will grow from 18 to 30 aircraft including the delivery of six Airbus A350s by 2014-15 for its long-haul network. According to Prasarttong-Osoth, the airline wants then to serve Europe and Australia.

In the three next years, Bangkok Airways wants to complete its network coverage of the Mekong region. “ We would like to have at least three entry points in each Mekong country, one in the north, one in the center and one in the South,” explained Prasarttong-Osoth.

Bangkok-Chiang Mai-Phuket/Samui already fills up Bangkok Airways’ dream in Thailand. Same story for Laos where the airline currently serves Luang Prabang (North), Vientiane (Centre) and Pakse (South). After Siem Reap and Phnom Penh in Cambodia, Bangkok Airways will launch flights to Sihanoukville from Siem Reap this winter and most probably from Bangkok in 2009.

More uncertainties remain, however, for Myanmar and Vietnam. In Vietnam, the airline flies only to Ho Chi Minh City and did not secure so far new routes to Hanoi and Danang/ Hue. “No decision has been taken yet on which airport to serve in Central Vietnam. Danang will be more business oriented but Hue would fit more into our strategy of flying to world heritage sites,” added Prasarttong-Osoth.

In Myanmar, only served by a daily flight to Rangoon, Bangkok Airways would like to fly to Bagan and Dawei in the South. “The situation remains more unpredictable in Myanmar, but we will start to fly next year to Bagan,” said the Bangkok Airways CEO.

The airline also indicated it is looking to further develop to China and India out of Bangkok.

However, the most surprising move is the announcement for a hub in Samui. The island is already linked by Bangkok Airways to five destinations –including Hong Kong and Singapore- covering most of the needs. The network will eventually expand to nine destinations within the next two years. The airline plans then to add flights to Krabi and Phuket but also open new routes to Bali and Shanghai.

This is where the term of “hub” sounds inappropriate. Hub operations request a high number of frequencies and routes allowing quick connections from one point to another. But it needs also both a local and transfer markets. All of them lack for Samui. The island has no local traffic, beside Samui-Bangkok, being mostly an inbound destination.

It is also hard to believe that there is any potential for a service between Bali and Samui or even for connecting traffic from Chiang Mai to Hong Kong or Shanghai. With Samui airport charges being higher than in Bangkok or Singapore, the profitability of such an operation is highly questionable.

And finally, a hub operation might also contribute to a further deterioration of Samui ecological balance. Many local hotel owners have recently shown their concern on the strain left by quick developing tourism on the island’s once pristine environment. By adding more flights – a requisite for a hub-, the airline might put further pressure on the fragile island’s eco-system.