Friday, 28 November 2008

Thailand may lose status as air travel, logistics hub

Thailand's Suvarnabhumi Airport

By Timothy Ouyang
Channel NewsAsia

SINGAPORE: Thailand may lose its status as an air travel and logistics hub in the region, according to some industry-watchers. With Bangkok's Suvarnabhumi Airport set to remain closed until Saturday, they said tourism in the country will be hit.

Suvarnabhumi Airport is seen as a key transit point for international travel into IndoChina. But analysts said it is in danger of losing that status.

Shukor Yusof, aviation analyst, Standard & Poor's, said: "Bangkok is going to lose a lot of investor confidence in terms of a gateway into IndoChina.

"What I think could happen in the near future is that Ho Chi Minh city's airport at Tan Son Nhat is going to be the main focus because there's stability in Vietnam. There's a lot of business going about in Vietnam and it also serves as a potential hub into Laos, Myanmar and Cambodia."

Hundreds of flights have been cancelled since the closure of Bangkok's Suvarnabhumi Airport on Wednesday and the national carrier, Thai Airways, is the hardest hit.

Bangkok has been competing to be the number one aviation hub in the region, against the likes of Singapore, Hong Kong and Kuala Lumpur. Some said the longer the disruption, the harder it will be for the capital to climb to the top.

Stephen Forshaw, vice president, Public Affairs, Singapore Airlines (SIA), said: "A lot of what you lose in a day, you make up in the days afterwards when the situation normalises.

"But the longer it goes on, the less attractive it makes Bangkok as a destination and that causes concern in markets that are traditionally very high sources of tourism for the Thai economy."

SIA added that the closure of Bangkok's Suvarnabhumi Airport will not have material impact on its revenue.

Apart from full-service airlines, budget carriers have also been using Bangkok as a hub. According to some market-watchers, they will feel even more heat from the disruption.

"These are the airlines that are going to feel the impact strongly because their businesses depend on tourism, on casual travellers within Thailand," said Shukor.

According to some estimates, the Singapore-Bangkok route accounts for as much as 35 per cent of the revenues of budget carriers operating between the two cities. So far, both Jetstar Asia and Tiger Airways said they have yet to assess the losses in revenue from the airport's closure.

Suvarnabhumi Airport currently handles more than 260,000 domestic and international flights every year. That is about 76 flights every hour, making it one of the busiest airports in Southeast Asia.

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