Tourism

Chiang Rai’s Mae Fah Luang Airport a New Hub for Thai AirAsia’s International Service

CHIANG RAI – Thai AirAsia is launching four new routes from Chiang Rai in northern Thailand at the end of Jan-2019 and the beginning of Feb-2019. Chiang Rai will become Thai AirAsia’s sixth hub after Bangkok, Chiang Mai, Phuket, Krabi, U-Tapao/Pattaya and Hat Yai.

Thai AirAsia is adding three international routes – to Kuala Lumpur, Macau and Singapore – as well as a new domestic service linking Chiang Rai with Phuket. Chiang Rai Airport has a small but fast growing international operation that until now has been limited to mainland China and Hong Kong.

The international market accounted for less than 10% of the nearly 3 million passengers handled by Chiang Rai in 2018. Chiang Rai’s traffic has more than quadrupled since 2010, driven mainly by domestic expansion. AirAsia is already the market leader and will widen the gap compared to competitors as it launches the four new routes.

Summary

Thai AirAsia is launching four new routes from Chiang Rai at the end of January and the beginning of February.
Thai AirAsia currently has only two routes at Chiang Rai but is the market leader, with a 23% share of seat capacity.
Thai AirAsia plans to start basing aircraft at Chiang Rai, supporting the four new routes and with more new routes likely to follow.
Thai AirAsia’s new routes from Chiang Rai to Kuala Lumpur and Singapore will be the airport’s first international routes outside Greater China.

Chiang Rai is AoT’s Smallest Airport but has been Growing Rapidly

Chiang Rai is the seventh largest airport in Thailand based on current seat capacity. It is the smallest of the six airports in the Airport of Thailand portfolio but is one of the fastest growing.

Passenger traffic at Chiang Rai has grown at a double digit rate for eight consecutive years. Airports of Thailand has not yet reported traffic for Dec-2018, but through the first 11 months of 2018 Chiang Rai passenger numbers were up by 16%, to 2.6 million.

Source: CAPA – Centre for Aviation and Airports of Thailand.

Chiang Rai likely ended 2018 with between 2.8 and 2.9 million passengers, consisting of between 2.6 and 2.7 million domestic passengers. Of the 2.587 million passengers handled in the first 11 months of 2018, only 203,000 were international.

Chiang Rai’s traffic passenger traffic has more than quadrupled over the past decade. In 2009 and 2010 the airport handled only 700,000 passengers. Chiang Rai did not have any international traffic back in 2009.

Chiang Rai Airport has benefitted as Chiang Rai and Thailand’s golden triangle region has emerged as a popular holiday destination for both Thais and overseas visitors. The airport is also the least congested of AoT’s six airports, making it attractive to Thai airlines as they look for potential alternative hubs due to the congestion in Bangkok (Don Mueang and Suvarnabhumi), Phuket and Chiang Mai.

International traffic grows rapidly, but from a very small base

Chiang Rai is predominantly a domestic airport, but a large share of its domestic traffic consists of international visitors and the airport has been keen to attract more direct international services.

Chiang Rai’s international traffic has grown rapidly over the past two years (although from a very low base) driven by new services to China. Chiang Rai handled approximately 230,000 international passengers in 2018, compared to only 30,000 in 2016.

The international market has accounted for approximately 200,000, or 25%, of the 800,000 total additional annual passengers from the past two years.

China has driven Chiang Rai’s international growth

Greater China (including Hong Kong) now accounts for all of Chiang Rai’s international services. Chiang Rai is currently connected with five cities in mainland China and Hong Kong (based on OAG data for the week commencing 14-Jan-2019).

The Chiang-Rai-China schedule varies considerably depending on the time of year. However, the general trend has been a large increase in capacity over the past two years as several airlines have entered the Chiang Rai-China market.

Two years ago China Eastern was the only airline operating services between Chiang Rai and mainland China. China Eastern began serving Chiang Rai in early 2012.

Over the past two years five Chinese airlines have entered the market – Beijing Capital Airlines, Donghai Airlines, Hainan Airlines, Ruili Airlines and Sichuan Airlines – along with Thai Lion Air.

China Eastern, Hainan, Ruili and Sichuan each currently operate three weekly flights to Chiang Rai, whereas at the moment Beijing Capital and Donghai do not have any services.

China Eastern serves Chiang Rai from Shanghai, Hainan from Shenzhen, Ruili from Jinghong, and Sichuan from Chengdu. Thai Lion currently has four weekly flights from Chiang Rai to Changsha.

HK Express has served Chiang Rai from Hong Kong since late 2016 and also currently operates three weekly frequencies. The LCC initially served Chiang Rai with two frequencies and introduced the third flight at the beginning of the current winter season (in late Oct-2018).

Air Asia to drive more rapid international growth for Chiang Rai in 2019

Chiang Rai’s international passenger traffic could double in 2019 and reach 500,000 passengers. While the mainland China market should experience more growth, most of the growth in 2019 will be generated by the new AirAsia routes to Kuala Lumpur, Macau and Singapore.

Kuala Lumpur and Macau will initially be served with four weekly flights and Singapore with three weekly flights.

Kuala Lumpur and Singapore are particularly significant as they will be Chiang Rai’s first international routes outside Greater China. AirAsia will rely heavily on connections beyond Kuala Lumpur, which is the group’s largest hub, whereas Singapore will cater to local point-to-point traffic.

Macau is part of Greater China (along with Hong Kong) and will also cater to local traffic. Thai AirAsia will likely add services to mainland China in a subsequent expansion phase, once the new base is up and running.

Chiang Rai becomes Thai Air Asia’s sixth base

Thai AirAsia has services to mainland China from all its existing bases except Hat Yai. Hat Yai is Thai AirAsia’s smallest base and consists of just one aircraft.

Thai AirAsia bases ranked by number of aircraft, routes and weekly frequencies

Base	Number of aircraft	Number of routes	Weekly frequencies
Bangkok Don Mueang	47	61	2,238
Chiang Mai	7	16	480
Phuket	3	11	384
Krabi	2	6	168
U-Tapao/Pattaya	2	10	103
Hat Yai	1	6	200

Khon Kaen is now Thai AirAsia’s largest destination that does not have an aircraft base. However, Chiang Rai will overtake Khon Kaen (as well as Surat Thani and Udon Thani) after Thai AirAsia launches the four new routes from Chiang Rai.

Khon Kaen currently has 58 weekly return flights, compared to 49 for Chiang Rai, Surat Thani and Udon Thani. The four new routes from Chiang Rai will be served with 13 weekly flights combined (four frequencies to Kuala Lumpur and three to Macau, Phuket and Singapore), resulting in a total of 62 weekly flights.

Thai Air Asia’s Chiang Rai expansion to result in 26% capacity increase

With the four new routes Thai AirAsia’s capacity at Chiang Rai will increase by 26%, to more than 22,000 weekly seats. Thai AirAsia’s Chiang Rai operation currently consists of six daily flights (42 weekly frequencies) from Bangkok Don Mueang and one daily flight (seven weekly frequencies) from Hat Yai.

Thai AirAsia competes against Bangkok Airways, Nok Air, Thai Lion Air, Thai VietJet and Thai Airways‘ full service regional subsidiary Thai Smile in the Chiang Rai-Bangkok market, but is the market leader with its 42 weekly frequencies.

Nok is the second largest competitor, with 36 weekly frequencies, followed by 31 frequencies for Thai Lion, 28 for Thai Smile, 21 for Bangkok Airways and 17 for Thai VietJet (based on OAG schedules for the week commencing 14-Jan-2019).

Nok, Thai AirAsia and Thai Lion are based at Bangkok Don Mueang, while Thai Smile/Thai Airways, Bangkok Airways and Thai VietJet are based at Bangkok Suvarnabhumi.

Thai AirAsia is the only airline operating between Chiang Rai and Hat Yai and will be the only airline offering nonstop flights on its three new international routes from Chiang Rai. However, it will compete against Thai VietJet on the new Chiang Rai-Phuket route.

Thai Air Asia to capture 28% share of Chiang Rai capacity

Thai AirAsia’s capacity share at Chiang Rai will increase from 23% currently to 28% in Feb-2019 due to the four new routes (which are all being launched between 30-Jan-2019 and 1-Feb-2019). Thai Lion is now the second largest airline in the Chiang Rai market by capacity, operating a 19% share, followed by Nok with 18%.

Chiang Rai capacity share (% of seats) by airline: week commencing 14-Jan-2019

Source: CAPA – Centre for Aviation & OAG.

In announcing the four new routes for Chiang Rai, Thai AirAsia stated that Chiang Rai would become its sixth hub after Bangkok, Chiang Mai, Phuket, Krabi, U-Tapao/Pattaya and Hat Yai. The airline plans to expand its fleet by four aircraft in 2019, providing an opportunity to open a base at Chiang Rai and further expand its other secondary bases.

Thai Air Asia needs Chiang Rai as it reduces its reliance on Bangkok

Thai AirAsia launched several new routes in 2018 from its secondary bases at Chiang Mai, Krabi and U-Tapao bases, in part as a result of infrastructure constraints at Bangkok and Phuket. Thai AirAsia plans to continue expanding at its existing secondary bases in 2019 (along with opening the new base at Chiang Rai), but will also pursue capacity expansion in Bangkok by upgauging to A321s.

In 2019 Thai AirAsia plans to take delivery of its first batch of 230-seat A321neos, which will be used to upgauge trunk routes at capacity constrained airports. Thai AirAsia’s current fleet consists of 51 180-seat A320ceos and 11 186-seat A320neos. The airline is projecting a 12% increase in ASKs for 2019, driven by a combination of upgauging at Bangkok, additional aircraft for existing secondary bases, and the opening of Chiang Rai as its sixth base.

Establishing the base at Chiang Rai is strategically important for AirAsia as it tries to diversify and reduce its reliance on congested Bangkok.

The new base also equips AirAsia for further growth in its already leading share of a fast growing market that has quietly emerged as one of Thailand’s most popular tourist destinations.

Tourism

Interior Ministry Introduces New 180 Day Destination Thailand Visa

People from more nations will be now able to enter Thailand without a visa beginning Monday. This is part of an effort to increase tourism and encourage visitors to stay longer, Interior Ministry spokeswoman Traisuree Taisaranakul said on Friday.

According to Ms. Traisuree, Interior Minister Anutin Charnvirakul has signed four documents that will make it easier for foreigners to travel. These modifications will all take effect on Monday, provided they are published in the Royal Gazette.

The instructions include 93 more nations on the list of individuals who can visit Thailand without a visa, up from 57 previously. People from these countries can stay for a maximum of 60 days. Additionally, from 19 to 31, nearly twice as many nations will be able to obtain visas on arrival in Thailand.

To attract digital nomads, artists, and tourists interested in learning or practicing skills such as cooking and Muay Thai, the country will also introduce the Destination Thailand Visa service.

The new form of visa, which is valid for five years, allows travelers to stay for up to 180 days.

According to Ms. Traisuree, students holding visas for master’s degrees or higher will not be required to leave Thailand immediately upon graduation. They will be able to stay for an additional year to hunt for work or vacation.

In order to enhance the economy and tourism, the cabinet took a general decision on these additional measures in May. The statement was meant to be released in June, but it was pushed back.

Ms. Traisuree believes that this is the greatest sort of visa for persons who want to work from home in the Land of Smiles and explore the nation without the various restrictions and complications that come with conventional tourist visas.

Getting a DTV will give you a 5-year multiple-entry visa that lets you stay in Thailand for a total of 180 days a year, with the opportunity to stay for another 180 days.

Ms. Traisuree said that the Destination Thailand Visa is great if you want to work from home in the Land of Smiles and see the sights without the many restrictions and problems that come with a regular tourist visa. The Destination Thailand Visa will cost 10,000 THB.

Qualifications for the Thailand Destination Visa (DTV)

According to Thai Embassy, to be eligible for the visa, you must fulfill the following conditions (which could change):

You have to be 20 years of age or older
You have to be able to afford the cost of the visa
To sustain your stay in the nation, you must demonstrate that you have at least 500,000 THB in your bank account
Proof of your employment with a recognized company is required.

For digital nomads or remote workers who want to make the most of their travels and yet have the opportunity to work while they’re there, the Destination Thailand Visa is designed just for you. Additionally, it is ideal if you are traveling to Thailand in order to partake in any of the following activities:

Thai food prepared with Muay Thai
Instruction and conferences
Sports medicine therapy
International talent International music and art events

Thailand DTV Visa Benefits

Additionally, there is uncertainty about these details and they could change:

In comparison to other Southeast Asian nations that provide comparable visas, Thailand has less stringent income requirements and charges for the visa. For another 10,000 THB, you can extend the visa once, for a maximum of 180 days.
There are ninety-three foreign nations that qualify for the Thailand DTV Visa.
With this visa, you can lawfully operate remotely for foreign clients and companies while in Thailand.
Your spouse and any children under the age of twenty may accompany you.
You are exempt from paying taxes on your foreign income because the visa allows you to stay in Thailand for up to 180 days.

Drawbacks of a Thailand DTV Visa

You are unable to work for a Thai company that needs a Thai work visa, even though you are still able to engage in some activities and make money. Your DTV will end if you decide to change the kind of visa you are currently on.

Additional information on the visa’s release date and application process will be available in late June or early July of 2024. You will most likely be able to apply for it via the Thai immigration office, a Thai embassy, or a Royal Thai Consulate.

Tourism

Hotels in Thailand Fret as German Itravel Group Files for Bankruptcy

Thailand’s Hotels Association (THA) reports that another German tour operator has gone bankrupt, but that this will have a far less effect than the recent bankruptcy of FTI Touristik.

Following notification from the Tourism Authority of Thailand (TAT), the Thai Hotels Association has now confirmed that the Cologne-based luxury tour operator Itravel Group has formally filed for bankruptcy.

Southern Thailand is home to numerous high-end resorts, which Itravel aims to attract, according to Thai Hotels Association president Thienprasit Chaiyapatranun.

As a result of Itravel’s bankruptcy, he said, the hotels association is currently collecting data from its members.

On Monday, the organization wrote to the TAT and the Foreign Ministry, requesting that they assist hotel operators in keeping up with legal developments surrounding the bankruptcy of the German tour operator FTI, which resulted in a loss of almost 111 million baht for hotels around the country.

Hotels having issues with Itravel

On Monday, during the THA monthly meeting, Mr. Thienprasit noted that they also emphasized the case’s urgency to Minister Sermsak Pongpanit of Tourism and Sports.

In response to allegations that hotel operators with business partnerships with Itravel were experiencing issues with financial transactions, the agency issued an alert to the industry, according to Siripakorn Cheawsamoot, TAT deputy governor for Europe, Africa, the Middle East and the Americas.

He speculated that the losses might be lower with Itravel, an online travel agency that focuses on the niche luxury market, than with FTI, the third operator.

According to the Bangkok Post, at Monday’s THA meeting, Mr. Sermsak stated that the ministry will look into measures to assist hotels, especially since the goal of 3.5 trillion baht in tourism earnings for this year is still very ambitious.

According to Mr. Thienprasit, the organization is opposed to the government’s plans to increase the legal foreign ownership of condominiums from 49% to 75%. This, he added, might lead to an increase in unlawful accommodations and make other condo residents feel uneasy about having more guests around the clock.

Unscrupulous investors

He said that some international investors are already breaking the law by renting out their rooms to day guests, even though the Hotel Act only permits rentals of at least 30 days.

An increase in the foreign ownership quota for condos, according to Mr. Thienprasit, could entice unscrupulous investors and lead to the construction of even more unlawful rooms, which now exceed the number of registered hotel rooms by a factor of two.

The success of Thailand’s hotel industry is highly dependent on the business of tour operators. These collaborations bring in a constant flow of visitors, particularly during busy seasons.

It is more convenient for passengers to book comprehensive packages offered by tour operators, which include hotel accommodations and activities. Because of this arrangement, hotels may anticipate a specific amount of bookings without having to spend a lot on advertising.

Additionally, hotels are able to provide more affordable rates, which appeals to guests who are mindful of their budget. But if tour operators go through slumps or start focusing on other places, this dependence might be disastrous.

Source: Bangkok Post, Thai PBS

Tourism

Embracing Paradise: Your Guide to an Unforgettable Vacation in Los Cabos

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