The Airports of Thailand Plc board has approved massive discounts on airport fees in a move to attract airlines to Don Mueang airport.
Sumet: Huge discounts for first two months
AoT chairman ACM Sumet Photimanee yesterday said the discounts, backed yesterday, would be huge in the first two months and become gradually smaller over three years.
From Aug 1 to Sept 30, when runways at the six-year-old Suvarnabhumi airport will be repaired, 95% discounts will be available for take-off, landing and hangar fees at Don Mueang.
AoT will work out the exact discounts for area rents and fees on passenger boarding bridges, check-in counters, indoor services and flight announcements within next week.
Discounts will be 30% from Oct 1, 2012, to Sept 30, 2013; 20% from Oct 1, 2013, to Sept 30, 2014; and 10% from Oct 1, 2014, to Sept 30, 2015.
ACM Sumet said the cabinet resolved on Tuesday that Suvarnabhumi airport will be the hub airport for full-service and connecting flights, while Don Mueang will serve low-cost carriers and point-to-point domestic and international flights. However, the relocation of airlines from Suvarnabhumi to Don Mueang must be voluntary.
The AoT chairman said Don Mueang could handle 36.5 million passengers annually.
Transport Minister Jarupong Ruangsuwan said 14 commercial and chartered airlines had agreed to move to Don Mueang. He had asked the cabinet to adopt the resolution to ensure that the use of Don Mueang would be permanent.
"Today it has been clearly concluded that the single-airport policy has changed to a dual-airport one," Mr Jarupong said.
He said the relocation incentives target low-cost carriers like Thai AirAsia which operate more than 100 flights per day. Their relocation will greatly relieve congestion at Suvarnabhumi, where an expansion project will take five years and 10 months to complete.
Suvarnabhumi is designed to handle 45 million passengers yearly but its volume has already reached 47 million.
Mr Jarupong said Don Mueang would be informally opened for relocated airlines in August and officially start full-scale services in October.
AoT president Anirut Thanomkulbutra said if all 14 airlines move to Don Mueang, the airport would serve 14 million passengers yearly. This figure would include 3 million passengers of Nok Air, which has been the sole scheduled carrier operating at Don Mueang since the airport resumed operations in March after being shut down in October last year by the disastrous floods.
The cabinet decision has several repercussions for the old airport apart from winning back its international status, according to AoT officials.
First, it provides a proper legal framework for AoT to expedite negotiations with the 14 scheduled carriers for the terms to shift their bases to Don Mueang.
Secondly, it is turning Don Mueang, which has been used largely for no-frills carriers for point-to-point domestic routes, into a fully fledged airport dedicated to no-frills airlines with point-to-point international services as well.
Thirdly, because Don Mueang will now be able to serve international flights, albeit by discount airlines, Bangkok will have two international airports in terms of actual operations and status.
"With the cabinet's blessing, we can advance talks with 14 targeted low-fare carriers," an AoT official close to the issue said yesterday.
AoT is optimistic it can clinch a deal with Thai AirAsia, Thailand's largest low-cost carrier, within the next few weeks. Thai AirAsia is the main target for relocation due to the magnitude of its traffic, with a projected 8 million passengers this year.
All international airlines operating under the low-fare model, including Airberlin, Jetstar Cebu, Jin Air, Indigo and Orient Thai, will be asked to shift to Don Mueang.
If all agree, they would take away about 10 million passengers a year under the current estimate from Suvarnabhumi, where passenger traffic is expected to soar to 51 million, way beyond its annual capacity of 45 million.
AoT is injecting 77 million baht incrementally, on top of 1.64 billion baht earmarked earlier for reviving Don Mueang from last year's floods, to renovate the Pier 4 section at its Terminal 1 to accommodate additional traffic.
Renovation of Pier 4 could be finished in two months when the first batch of airlines move in.