Orient Thai may start $100m airline in HK<\/p>\n
Arijit Ghosh, Bloomberg\/Bangkok<\/p>\n
Orient Thai Airlines Co., which operates Thailand's largest
\ndiscount carrier, may spend as much as US$100 million to start a
\nlow-cost service based in Hong Kong to tap rising air traffic
\nbetween the city and China.<\/p>\n
Orient Thai, which operates Bangkok-based carrier 1-2-Go, may
\nset up the new airline on its own if negotiations with its Hong
\nKong-based partner CR Airways Ltd. fail, Chief Executive Udom
\nTantiprasongchai said.<\/p>\n
Orient Thai wants a Hong Kong-based venture to tap business
\nfrom the 70 million travelers who are expected to go by land, sea
\nand air to China from the city next year. By offering cheap
\nfares, Orient Thai is aiming to compete for business with trains,
\nbuses or regular airlines like Hong Kong Dragon Airlines Ltd. and
\nChina Southern Airlines Corp.<\/p>\n
"China is the target," Udom said in an interview in Bangkok.
\n"In the very near future, there won't be any restrictions" for
\ncarriers to fly between Hong Kong and China.<\/p>\n
China, the world's most populous nation and the fastest-
\ngrowing major economy, also has the biggest untapped tourism
\nmarket. About 20 million Chinese traveled abroad in 2003, their
\nvisits restricted to only two dozen countries.<\/p>\n
"About 80 percent of the market hasn't been tapped," said
\nPeter Harbison, managing director of the Center for Asia Pacific
\nAviation in Sydney. "The only thing that is stopping the growth
\nis government rules."<\/p>\n
Starting in September, restrictions were relaxed to make it
\neasier for Chinese citizens to visit the 29 countries of Europe,
\nincluding the U.K.<\/p>\n
Closely held Orient Thai, which flies 14 aircraft, plans to
\nbuy as many as 10 new planes to expand its business in Thailand
\nand abroad. The Bangkok-based company also plans to sell shares
\nin an initial public offering next year.<\/p>\n
Discount carriers have mushroomed in Southeast Asia, a region
\nwith a combined population of 500 million people. Up to nine
\ndiscount carriers will fly in the region by the end of 2005.<\/p>\n
Thailand, with a population of about 64 million people, has
\nthree discount airlines in addition to the national carrier Thai
\nAirways International Pcl.<\/p>\n
Orient Thai's 1-2-Go competes with Nok Air Co. and the Thai
\nunit of AirAsia Bhd. Competition is also coming from Singapore
\nAirlines Ltd.'s low-fare carrier Tiger Airways and Valuair Ltd.,
\nwhich both fly to Bangkok from Singapore.<\/p>\n
That's forced airlines to look for business in North Asia, a
\nregion that encompasses South Korea, China, Japan, Taiwan and
\nHong Kong.<\/p>\n
"We can use Hong Kong as a springboard to expand in other
\nparts of Asia," Udom said.<\/p>\n
Orient Thai, which also has a daily service to Hong Kong from
\nBangkok and the beach resorts of Phuket and Krabi, plans to fly
\nto other Asian nations from Bangkok.<\/p>\n
Rising oil prices may affect the company's plans. The price of
\njet fuel has surged 66 percent this year to a record $63.95 a
\nbarrel on Oct. 14. They were trading at $63.70 a barrel
\nyesterday, according to Platts pricing service.<\/p>\n
Orient Thai spends half of its operating costs on buying fuel,
\nUdom said. Fuel costs typically account from between 15 percent
\nto 25 percent for regular scheduled carriers such as Thai
\nAirways.<\/p>\n
AirAsia's jet fuel make up about 43 percent of costs,
\naccording to the airline.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/orient-thai-may-start-100m-airline-in-hk-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}