Thai AirAsia (TAA) looks set to start serving Vientiane as the second city in Laos, which until recently was largely off-limits to low-cost carriers (LCCs).
TAA will become the first no-frills airline to operate on the Bangkok-Vientiane route when it launches daily flights in July.
The Vientiane start-up follows TAA's successful entry to Luang Prabang. The airline commenced a daily service from Bangkok on March 24, becoming the first LCC to serve the old royal city.
ML Bovornovadep Devakula, director of business development at SET-listed Asia Aviation Plc, the major shareholder of TAA, has confirmed securing the rights to start the Vientiane flight from Laotian authorities.
"There is greater understanding among [Laotian] officials now about the role of airlines in driving tourism and economic activities, which Laos now seriously wants to promote," ML Bovornovadep told the Bangkok Post.
Serving the capital cities of Asean states has been the main strategy for network expansion in the region for TAA.
"When it comes to flying to a country, we normally make sure that we descend on the capital city and then to another tourist spot," he said.
But Laos is a different story, presumably because its authorities place higher priority on promoting tourism in Luang Prabang, especially at the end of the high season, and TAA's entry there would have the biggest impact, said the executive.
TAA aims to attract many Thais who normally travel to the Laotian capital by catching a domestic flight from Bangkok to Udon Thani before travelling by road to Vientiane.
"We believe there will be a lot of people who want to fly directly to Vientiane, avoiding hassles, cutting travel time and saving travel costs related to multi-mode transportation," he said.
"We think we can fly them directly with a fare of only 1,500 baht [one-way]," he added.
Laos' Ministry of Information, Culture and Tourism estimated there were 4.3 million international tourist arrivals to the landlocked state last year, an increase of 4.88% from 4.1 million in 2014, generating US$670 million in revenue.
Thai nationals represented the majority of those arrivals, followed by Vietnamese and Chinese.
An initial schedule listing on air route websites is for a TAA flight leaving Bangkok's Don Mueang airport at 12.05pm, arriving at Vientiane's Wattay airport 1.25pm. The return flight departs Wattay at 2.15pm and arrives at Don Mueang at 3.35pm.
TAA has no plans to fly other cities in Laos as the airline wants to concentrate on Luang Prabang and Vientiane, ML Bovornovadep said