The Thai no-frill airline is expanding into India to increase utilisation of its existing seven aircraft and boost revenues.
BANGALORE: Last year Qantas’ low-cost subsidiary Jetstar Asia grounded its services out of Bangalore. But that has not deterred Thailand’s low-fare airline Nok Air from choosing India’s IT capital as its first global destination.
The Thai no-frill airline, which has a 28% market share at home, is expanding into India to increase utilisation of its existing seven aircraft and boost revenues.
The airline will launch daily flights from Bangalore to Bangkok from June 1 on Boeing 737-400 with a capacity of 150 seats. “By operating overnight flights to Bangalore, we are improving our aircraft utilisation.
During day time, we can operate domestic flights and in the night time, instead of keeping our aircraft idle, we will fly to India,” said Nok Air chief operating officer Patee Sarasin.
India scored over other attractive Asian destinations thanks to its air traffic potential and open regime. “If you look at Singapore and Malaysian markets, they are more or less saturated while China follows a protectionist policy. Today, the air traffic between India and Thailand is growing at the fastest rate — at a whopping 20-30% annually,” saidSarasin.
With promotional fare starting from Rs 9999 for a round trip, the airline would require a 70% load factor to breakeven.
But unlike Jetstar Asia, the Thai budget airline is looking beyond mere low-fares. It has tied up with international brands like Bebe, Replay, Bossini, Nike and others to offer special discounts to its flyers.
“One of the reasons Jetstar Asia had to pull out was because its focus was on fares and it was discounting its fares heavily. We believe in offering flyers more than that,” Sarasin said.
Nok Air, which has landing rights for Chennai, Hyderabad and New Delhi (besides Bangalore), has earmarked Rs 20-30 crore for marketing and promotion. The carrier has roped in Bird Group for marketing and distribution in India.
The Thai Airways’ low-cost arm, which began operations in 2004 with an investment of Rs 500 crore (500 million Baht), has broken even in the domestic market and recorded a 400% jump in its profit to Rs 160 crore (160 million Baht) in 2006 from Rs 41 crore (41 million Baht) in 2005.
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