TAA looking at commuter service

On the heels of the forthcoming launch of Thailand's first long-haul low-fare carrier, the Thai AirAsia (TAA) group hopes to branch out further in the airline business.

The group is pondering a move into short-distance and inter-provincial routes using turboprop aircraft.

The proposed commuter airline would allow TAA to create an integrated supply chain serving the entire spectrum of travel demand — from long distance by Thai AirAsia X (TAAX) to short haul by Thai AirAsia and the new commuter carrier.

TAA group boss Tassapon Bijleveld confirmed to the Bangkok Post that a study of creating a commuter carrier, also termed a regional airline, is under way.

"We want to have our own regional airline to serve passengers who may want to visit smaller provinces in Thailand, like the up-and-coming Nan," he said.

One option is take over Siam General Aviation (SGA), whose founder Jain Charnnarong called it quits this year, citing health issues.

The other alternative is to create TAA's own commuter airline from scratch.

Acknowledging that the company had received an offer for the sale of an SGA stake, Mr Tassapon said TAA had sought advice from the Civil Aviation Department about whether the acquisition of SGA, especially its operating licence, would be legal.

"It is unclear to us whether the acquisition of an operating airline is allowed," he said.

A go-ahead would provide a shortcut for TAA to pursue a regional airline and fill the gap in its network.

"That would an easier way, like buying instant noodles," Mr Tassapon said.

TAA is weighing its options for setting up the new airline but is not in a rush to make a decision, given the country's political turmoil that effectively put several of the company's plans on the back burner.

It is unlikely that TAA would create the commuter airline this year, said Mr Tassapon, who is TAA's chief executive and the major TAAX shareholder.

"What we are doing is having the plan ready and when the timing is right and the market returns to normalcy, we execute the plan," he said.

TAA's planned entry into commuter service is unprecedented for the fledgling AirAsia, the continent's biggest LCC group, which has maintained a volume-driven business model since its inception a decade ago.

If the plan comes to fruition, TAA will be the first entity under the AirAsia banner to run a commuter airline.

For its part, SGA ceased operation on March 30 after serving a "letter of termination" to Nok Air to suspend charter service on secondary routes for the budget airline.

SGA had operated as Nok Mini since 2009 as an associated airline of Nok Air with no equity participation.

Nok Air had let SGA adopt the Nok Mini brand free of charge, piggybacking on Nok Air's brand value, network and booking coordination, sources said.

Earlier this year, SGA at first wanted to sell its interest to Nok Air, but talks broke down over SGA's price tag, prompting SGA to turn to TAA to make an offer.

After its break-up with SGA, Nok Air moved to establish its own regional network. So far it has placed firm orders for four Q400 NextGens, the 86-seat jet-speed turboprop from Canada's Bombardier, to fill the vacuum left by SGA.

The long-haul carrier TAAX is scheduled to take to the skies on June 17 despite the tourism market being dragged down by the country's political turmoil.

After putting off the launch previously planned for the first quarter, TAAX will launch its maiden service from Bangkok's Don Mueang airport to Incheon, South Korea on June 17 and kick off regular flights to Japan's Narita airport in Tokyo and Osaka around July.

TAAX will have two leased Airbus A330-300s, with 377 seats, in service this year.

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