Airline Chiefs Urge Cuts In Airport Fees

July 12--The heads of two leading budget carriers have urged Thailand to reduce airport charges to help restore tourist arrivals lost during the prolonged political turmoil.

Jetstar Asia chief executive Barathan Pasupathi suggested the state-controlled Airports of Thailand Plc (AoT) look at the rebates and incentives that Singapore's Changi airport is offering to airlines as a traffic stimulant.

AirAsia Bhd chief executive Tony Fernandes said lowering charges at airports, including aircraft landing and parking fees and passenger service charges, will help woo arrivals back to the country.

The two executives underscored the need for airport incentives to help airlines reduce operating costs so they can offer attractive fares for travel to and from Thailand.

"Charges at airports are too high here. The government and airports have to look at lowering fees to stimulate the economy," said Mr Fernandes, the outspoken head of Asia's largest no-frills airline group.

"Low fares are a great way of bringing people back to Thailand," he told the Bangkok Post, adding that AoT "needs to look at the volume game".

"Thailand is one of the world's most popular destinations and has always been a resilient market," said Mr Pasupathi of Singapore-based Jetstar Asia.

"However, given the recent impact on tourist arrivals, airport initiatives will help airlines, the tourism industry and travellers return to Thailand."

The Singaporean executive cited the Growth and Assistance Incentive (GAIN) programme just rolled out by Changi airport as a model the AoT could adopt to stimulate traffic. Under the scheme estimated to cost S$100 million, all airlines operating at Changi are given an across-the-board reduction in operating costs, including rebates of 50% on aircraft parking fees and 15% on aerobridge fees from July 1 this year to June 30, 2015.

In addition, the airport operator will introduce a new package of incentives over the next 12 months that will reward airlines for growing transfer traffic at Changi.

Changi's operators said they will work with airlines to boost efficiency at their terminal operations and provide funding if needed.

The airport operator will also invest in marketing campaigns to promote Singapore as a tourist destination in major markets such as Australia, China, India, Indonesia and Russia.

Mr Pasupathi said the GAIN programme was adopted by Changi even though it was not in dire straits as is Thai tourism.

"Changi just shows what can be done to boost traffic," he said.

The International Air Transport Association (IATA) said the GAIN scheme will not only reduce airlines' costs at Changi but also help Singapore grow as an aviation hub.

In the first five months of 2014, tourist arrivals dropped by 5.9% year-on-year to 10.4 million, while tourism revenue declined by 3.9% from a year earlier to 76 billion baht, reported the Thai Tourism Department.

Arnupap Gaesornsuwan, the department's director-general, said political rallies, the imposition of the emergency decree, martial law and the curfew caused the downturn.

Thailand recorded 26.5 million visitors in 2013, but months of street protests and political bloodshed have undermined arrivals, tarnishing Thailand's reputation as the "Land of Smiles".

The government cut its forecast for tourist arrivals this year to 25.9 million, down from 28 million.

Mr Fernandes' call to reduce the passenger service charge has gone unheeded by AoT, which has sought to raise rates that have remained unchanged for seven years.

AoT runs Thailand's six key airports and wants to raise the foreign passenger charge from 700 baht to 800, and the domestic charge from 100 baht to 150.

Copyright 2014 - Bangkok Post, Thailand

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