Airlines justify their high ticket prices, claiming the rates are due to increased operational expenses resulting from rising fuel costs and other factors.
Nok Air’s Chief Executive, Wutthiphum Jurangkool, explained that airlines also experience increased costs for multiple items in the aviation supply chain following the pandemic.
These encompass jet fuel prices, constituting approximately 30% of total operations, influenced by the Russia-Ukraine conflict, as well as higher prices for spare parts and aircraft insurance, according to Mr. Wutthiphum.
Additional significant costs stem from extended aircraft leasing contracts lasting an additional 3-4 years.
Although leasing rates are lower, Mr. Wutthiphum mentioned that an aging fleet typically demands higher maintenance costs, contributing to overall operational expenses.
Last week, the topic of expensive domestic airfares gained attention as passengers took to social media to express their dissatisfaction with high ticket prices, such as a 7,595 baht fare from Bangkok to Trang compared to a 4,200 baht fare to Singapore on the same date.
Mr. Wutthiphum explained that airfares typically increase during peak travel seasons, as most passengers travel from Bangkok to other provinces, causing an imbalance in traffic and requiring airlines to adjust their pricing to manage costs.
In response to the transport minister’s request for airlines to maintain prices, Mr. Wutthiphum noted that average airfares for the Songkran holiday and upcoming low season have already been reduced to levels closer to those seen in 2019.
Nuntaporn Komonsittivate, Thai Lion Air’s Head of Commercial Operations, stated that the airline has already set domestic airfare caps below the limit mandated by the Civil Aviation Authority of Thailand (CAAT) at 9.4 baht per kilometer.
She explained that it is standard for prices to rise more than usual during the Songkran holiday due to high demand as locals book trips to visit their hometowns, and tourists reserve tickets to travel south for a summer vacation.
Ms. Nuntaporn said that airlines have recently disclosed their pricing plans to the CAAT and demonstrated that their dynamic pricing strategies align with market systems, as observed in other countries’ aviation industries when passengers seek to purchase tickets with fewer available seats.
“With the upcoming Songkran holiday being the first time in three years that things have returned to normal, most passengers have planned and booked their tickets in advance. Our load factor during this period has soared above 80%. It’s common for those who want to purchase with a short lead time to face higher airfares,” she said.
