THAI Smile ventures to Luang Prabang

HAI Smile started a four-weekly service to Luang Prabang Saturday 15 December, a step that will raise competition between the national airline and Bangkok Airways a few notches.
A business unit of Thai Airways International, THAI Smile’s A320 landed at Luang Prabang’s tiny airport in cloudy weather and a cold snap with temperatures falling as low as 7 degrees during the evening.
Heavy rainstorms that covered North Laos and Thailand didn’t appear to dampen THAI Smile managing director, Woranate Laprabang’s enthusiasm for the new route, the first since launching services to two cities in China and Mandalay in Myanmar earlier this year.
“We can achieve a 70% cabin factor over the first three months,” he told press invited for the inaugural flight on the airline’s newest Airbus 320-200.
“Around 40% of the passengers on the Luang Prabang route will be connecting from TG flights from Europe, Australia and Japan and around 60% will be driven by Thai group traffic and local online or agency sales generated in Luang Prabang,” he explained.
THAI has appointed three local travel agents in the world heritage town to sell tickets in addition to its direct online booking channel www.thaiairways.com, where fares are slightly cheaper.
Local travel agents in Luang Prabang can combine THAI Smile flights with connecting services on TG to points in Asia, Australia and the Middle East. Passengers wishing to connect with TG’s late night flights to Europe, however, will face a down time of around 11 hours at Suvarnabhumi Airport as the return flight from Luang Prabang lands in Bangkok at 1345.
The Luang Prabang launch pitches THAI Smile in direct competition with Bangkok Airways, which is credited with putting Luang Prabang on the tourist map as the first foreign airline to serve the destination in 2002.
It flies two daily ATR-72 aircraft offering a capacity of 980 seats a week compared with THAI Smile with four weekly services and a capacity of 672 seats in a two-class configuration (12 in plus class and 156 in economy).
THAI Smile pitches its promotional roundtrip fare at Bt7,300 inclusive of taxes and surcharges compared to around Bt10,485 on Bangkok Airways after adding fuel surcharges and tax.
The THAI Smile promotional fare is not applicable over Christmas and New Year, but according to the press release it has an open validity, on sale until further notice on a specific seat allotment for each flight.
THAI Smile’s managing director has done his sums. Up until now through interline agreements Bangkok Airways has been picking up THAI passengers from Europe who needed to connect with a flight to Luang Prabang. That business alone should sustain the flights this side of March 2014 when the peak tourist season closes.
It can also rely on Star Alliance airlines to feed traffic through to the THAI Smile flight.
Bangkok Airways also has a strong network of code-share partners that can tap traffic from Air Berlin, Etihad, Qatar, EVA and British Airways, to sustain the two daily flights.
Connecting business should keep THAI Smile on track to reach its first quarter cabin factor targets. However, once the peak season ends in March, the destination relies heavily on Thais and tourists from neighbouring countries. Chinese are also emerging as a major market.
Mr Woranate admitted the challenge is to gain tour bookings from European tour operators for the remainder of the peak season. They book flights months ahead, while the THAI Smile launch came well into the peak season with little advance warning for tour operators.
“We are planning a road-show in Europe end of January and February,” he explained in the lead up to THAI’s trade promotions at the annual ITB Berlin trade fair in March.
By the close of the peak season, Mr Woranate believes cabin factors will settle at around 60% and may prompt the airline to reduce frequency until the 2014 peak season in November, when cabin factors could rise once more to 75%.
“We are considering daily services to Luang Prabang for the peak season 2014, once we have strong market awareness for our services in Europe,” he said.
Luang Prabang’s strongest markets in Europe are France with 44,000 visits a year and the UK with just over 35,000.
In 2012, 3.3 million foreign tourists visited Laos and the country estimates that will rise to 3.7 million this year.
China is driving the growth with massive increases in arrivals this year, despite the lack of direct flights to Luang Prabang the country’s top destination.
Thailand remains a top source market, year-round for Laos, but it is mainly overland travel that generates 1 million trips and earns around US$21 million. Most of the tours heading for Luang Prabang transfer by minibuses over the 400 km distance on highway 13 via Vang Viang. The trips cost around Bt8,000 to Bt10,000 per person for a two-night stay in the world heritage town. The same tour costs Bt14,000 to Bt16,000 using airline travel both ways.

Sourced: ttrweekly