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Ease up on Bangkok Airways, says real estate MD News Feed

In recent months, Bangkok Airways has been at the receiving end of a significant amount of criticism relating to its Bangkok-Samui route.

As reported in Property Report Thailand’s December edition, the airline axed a proposed fare hike following complaints from Samui business owners and tourism industry workers that it would have an impact on the island’s economy.

But not everyone is pleased with the airline’s flip flop. In fact, John Birt, managing director of Samui Villas and Homes, says businesses should be thanking the airline for opening up a whole new market to them, rather than protesting.

“People react to any news about Bangkok Airways without thinking it though. All of us in business on the island wouldn’t be here if not for BA,” says Birt, adding that the airline’s CEO, Dr Prasert Prasarttong-Osoth, came to the island and built the airport himself, when nobody would assist him financially. “Most people don’t know the true story behind the airline.”

Bangkok Airways built its own private airport on Ko Samui, which was opened in April 1989 and offers direct flights between the island and Phuket, Hong Kong and Singapore.

For the first time in five years, Bangkok Airways hiked the round-trip economy-class airfare on its Bangkok-Samui service from Bt7,100 to Bt9,760 last last year. The airline also raised the "M" class ticket price by Bt100 per trip. Passengers with a Samui resident card would be allowed a 35%t discount. The fare hike was scrapped just days later, following the local outcry.

The airline’s monopoly over the airport has long been a source of contention, and the key reason for the anger over the fare hike.

Tourism operators and hospitality-related businesses said they feared visitors would choose Phuket or Krabi over the island, due to the cheaper airfares.

But Birt says opening Samui’s runways to more airlines isn’t the answer.

“The airport is a very good filter,” said Birt, adding that Samui just couldn’t cope with fleets of jumbo jets coming in, as is the case in Phuket. “The island would be destroyed.”

Instead of taking the assumption that nobody will come if the airfares are higher, Birt says people should instead consider the positives.

 “Hoteliers should think about upgrading their product,” he says, noting that if everybody focused on driving the island upmarket it would be beneficial for all involved. Even now more private jets are coming into the airport, says Birt.

According to media reports, Bangkok Airways expects its profit this year to fall from 7% last year to 2% this year. The airline blames higher fuel prices and operating expenses, including the move to Suvarnabhumi Airport.

The Samui flights, which carry 600,000 passengers a year, generate 40 per cent of the airline's total revenue. Passenger traffic has increased 15 per cent annually.

Bangkok Airways said the fare increase was approved by the Transport Ministry. Sources alleged the approval came at the end of September when the country was without a government, following the ouster of former prime minister Thaksin Shinawatra.

Apart from this, the airline has also declared Samui Airport open to all other airlines for operation, following rules and regulations issued by the CAD. Bangkok Airways is now collaborating with THAI on a code-share agreement for the Bangkok-Samui route.

In the end, Birt says business owners should keep their criticism to themselves.
“I do believe they should allow [Prasert] to make his own decisions instead of having a knee-jerk reaction. Sure as hell, [the hoteliers] crank up their room rates every year when their costs go up.”

Luxury Villas & Homes 101