Airports Of Thailand PLC

[Greg_B 306]

Foreign airlines blast AoT charge scheme

 

High costs may derail regional hub plan

 

Boonsong Kositchotethana

 

International carriers have criticised a plan by Airports of Thailand Plc (AoT) to impose a hefty two-stage increase in airport charges, saying the extra costs could seriously endanger Bangkok's status as a regional hub.

 

The International Air Transport Association (IATA), the Montreal-based industry body representing 270 airlines, was joined in issuing the warning by most international airlines serving the Thai capital.

 

IATA and the Board of Airline Representatives in Thailand, a coalition of about 60 major carriers, said operating costs at Don Muang were already considerably higher than in Singapore and Malaysia if all hidden fees were taken into account.

 

AoT, the partially privatised airport authority, is still waiting for the Transport Ministry to sign off on the decision by the Civil Aviation Board (CAB) to allow AoT to raise aircraft landing and parking fees by 20% on Oct 1, to be followed by another 15% hike the year after.

 

The CAB also recommended that AoT be allowed to raise passenger service fees, commonly know as the airport departure tax, to 700 baht from 500 baht for international departures, and to double the fee for domestic flights to 100 baht.

 

AoT plans to impose the new rates when Bangkok's new international airport, Suvarnabhumi, starts commercial operations later next year or early in 2006, AoT officials confirmed.

 

But Anthony Concil, IATA's director for communications, said the fee increases were out-of-step with the industry's belt-tightening trend.

 

''AoT is already making significant profits and to seek increases in charges is unjustified. Further, there has been no noteworthy improvement in service quality to justify any increase,'' he said.

 

''It could seriously jeopardise Bangkok's plan to maintain hub status in the region. Given the large investment in Suvarnabhumi Airport, it would be a shame to have a world-class hub sit idle due to a misguided charging policy,'' he added.

 

Reflecting the industry's common view on the issue, IATA said that in today's economy, cost reduction was the name of the game for airlines. With average airline profit margins in the 2-3% range, it was imperative that all industry partners join in these efforts and Bangkok's airport was no exception, he said.

 

''Landing fees are important, but the bottom line is the total cost of operations. Yields to Bangkok are weak, reflecting the large amount of tourist traffic. As a result, to have sustainable operations, costs at the airport must be low,'' IATA said.

 

Some major Western carriers are pondering whether they would be better off moving their Southeast Asian hub out of Bangkok, or even bypassing the Thai capital altogether, according to Bangkok-based airline executives.

 

AoT executives insisted that the airport service fees are needed to fund AoT's 86-billion-baht investment in Suvarnabhumi Airport, scheduled to open on a trial basis in September 2005. The new airport will be run by AoT subsidiary New Bangkok International Airport Co Ltd NBIA.

 

 

 

 

 

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[Pieman 0]

Intersting story.

 

If they do go through with the increases then they will quite likely lose a fair amount of traffic. Of course, we all know what the answer to that will be - raise prices again to compensate for lost revenue. TIT.

 

Cheers

Pie

[Crackpot 2]

But doesnt anyone get worried by 'Passenger taxes'

 

I think passenger taxes anywhere are a complete and utter ripoff.

 

Without passengers there wont be any air transport and no need for Airports.

In some cases when flying from UK airports to the EU, the taxes are actually higher than the airfare

[monkeyman 1,597]

I think I'll walk in future.

[Emil 0]

I'm not worried if they raise the departure tax to 700 as the 200 baht increase should be offset by lower prices to and from the airport and Pattaya.

 

Emil

[Greg_B 306]

Just because it will be reduced in mileage, won't mean the ride will be any cheaper. I'll bet there expenses will go up at the new airport also...

[Emil 0]

Greg,

 

I've never seen my taxi driver ever pay when he dropped me off at the terminal and this current service that I use to take me to Pattaya only made me pay for his parking while waiting for my arrival. Maybe if you use a service that is located at the airport their fees may increase which would be passed onto us. In addition to the new airport being about 55 Ks closer to Pattaya, the amount we pay for tolls will also be reduced.

 

Emil

[Greg_B 306]

Like any other airport in the world, there is a surcharge for the service at the airport. ... Ever notice a coutesy van..? They have to pay a "surcharge" to the airport for being allowed to pickup/drop off at certain places...Most get it by charging for an access card to open a gate into an area or a License Fee to be allowed the "privelage". Lots of "hidden" airport charges we never see and assume they aren't there..

 

I would expect BKK to charge, just like the rest of them do...Here is the website for anyone who wants to see how the new airport is coming along..

 

 

http://www.bangkokairport.org/airport/about_demo_eng.asp

[Emil 0]

Greg,

 

I still don't believe that the taxis are paying anything to the airport unless they are not passing the cost onto us. If you take a metered taxi and its 200 baht when you arrive, they've never asked me for anything above what shows on the meter.

 

Emil

[Greg_B 306]

Your not getting the point, Emil.......Most taxi's have to pay a yearly fee to be allowed to pickup/drop at the airport.

[nidnoyham 30]

Maybe they'll follow B.A.A policy and fill the airport with shops and sevices like Heathrow. T3 departure lounge used to be a huge open space, now I get clostrophobic walking around the duty-free, bars, shops etc. I did hear a comment that they made more revenue from retail outlets rent and commision than from airlines fees. Takes some believing, especially with their fees being so high. No wonder they feel constantly theatened by SPL/FRA/ & CDG for main European hub airport.

 

Crackpot is right about the passenger generating the need for the airports. Likewise without the airlines, there would be no demand for them.

 

It is a strange situation therefore, that although the airline industy is going through financial crisis, (My old outfit, Air Canada has been on the brink of going down for over a year), that there is all this talk of 50% travel expansion over the next 10 years by air and huge expansion of airports.

 

Terminal 5 at LHR is enormous, plus talk of a 3rd runway to cope.

 

The cost of these 2 projects alone is astronomical. Millions were spent on the enquiry about the need for T5, before a brick was laid.

 

So, how much has the profteering by the likes of the B.A.A, with its astonomical charges for landing fees, had to do with the airline industry's problem ? For instance , the new baggage transfer system at T3 LHR was paid for by the airlines who use it, as is anything you want to improve your service. Airside work is ridiculous, we wanted an aerial put up for our rest room t.v and was quoted £600, to have a combi' lock on door for same £350. All work must be done by B.A.A.

 

No airlines- no airport.

 

I feel better now, have a cuppa and lay down in darkened room.

[Emil 0]

Greg I'm not sure your getting the point. Assuming that these taxis do pay an annual fee to take us to the airport, then anyone who uses them even if they don't travel to the airport is helping to pay this fee as it would be built into the metered rate. These taxis don't have 2 metered rates, one for going to the airport and one for everyplace else. Also this fee cannot be too large, the lowest fare I've seen from Pattaya to the airport is 750 baht, their costs for fuel, depreciation, maintenance, driver and other overhead would mean this fee is very small to still provide a profit for this business.

 

Emil

[Babepecker 0]

Your not getting the point, Emil.......Most taxi's have to pay a yearly fee to be allowed to pickup/drop at the airport.

 

I don't believe they do. Please, don't bring them onto this idea...