AirAsia has selected Brisbane-Bangkok as its first route connecting Australia and Thailand, a surprise move given the LCC group does not currently have any services to Brisbane Airport. Launching from 25-June-2019, it will become the group’s fifth destination in Australia (after Avalon, the Gold Coast, Perth and Sydney) as Thai AirAsia X launches a four times weekly Brisbane-Bangkok service.
- Thai AirAsia X is launching services in June from Bangkok to Brisbane;
- Bangkok-Brisbane will be AirAsia’s first service between Thailand and Australia and also the group’s first service to Brisbane;
- The selection of Brisbane over other Australian gateways is somewhat surprising as typically the group follows a connect the dots strategy with new international routes.
AirAsia serves all four of its current Australian gateways from Kuala Lumpur and also links Perth with Bali. The group dropped services from Melbourne and Sydney to Bali in 2016. It also served Adelaide from Kuala Lumpur until early 2015 and terminates its Gold Coast-Auckland tag flight this weekend.
The launch of Brisbane-Bangkok marks the resumption of growth for AirAsia in Australia after dropping four routes and reducing capacity on most of its remaining routes. AirAsia passenger traffic to/from Australia dropped 17% in the fiscal year ending Jun-2018 (FY2019) to 1.7 million.
Brisbane-Bangkok also marks the first time AirAsia has connected Australia with Thailand nonstop although its affiliate Thai AriAsia X has looked at serving this market since launching in 2014.
AirAsia has offered a one-stop product from Australia to Thailand for several years, which has proven popular with Australian travellers. It will continue to offer an attractive one-stop product from Avalon, Gold Coast, Melbourne and Perth to nine destinations in Thailand via the group’s Kuala Lumpur hub.
Passengers on the new Brisbane route will be able to connect in Bangkok to even more destinations in Thailand as AirAsia has 21 domestic routes from Bangkok. Brisbane passengers will also be able to connect in Bangkok to international destinations throughout Southeast Asia, North Asia and South Asia (similar but not quite as extensive as the connections available from Avalon, Gold Coast, Perth and Sydney as Kuala Lumpur is a bigger hub).
Typically, an LCC group follows a connect the dot strategy as it grows in an overseas market, enabling it to leverage existing contracts with airports, ground handlers and other suppliers. However, with Australia, AirAsia has deviated from this strategy by selecting Brisbane.
AirAsia was likely wooed to Brisbane by its Attracting Aviation Investment Fund, which is supported by the Queensland Government, Tourism and Events Queensland and Brisbane Marketing. The stakeholders hope AirAsia X will stimulate demand and bring more Thai visitors to Queensland.
However, most passengers on the new Brisbane-Bangkok service will likely be Australians as Thailand is one of the most popular holiday destinations for Brisbane area residents. Brisbane Airport considers the Bangkok route underserved. Thai Airways, the only nonstop competitor, reduced Brisbane-Bangkok in Oct-2018 from seven to four weekly frequencies, leaving this potential opening for AirAsia.
Gold Coast Airport, located 100km south of Brisbane, had been keen to attract Thai AirAsia X as it does not currently have any link to Bangkok. It may now have to work hard to make sure it does not lose its Kuala Lumpur service to Brisbane.
In Dec-2018 Melbourne Tullamarine lost its only AirAsia route, a double daily service from Kuala Lumpur, to rival Avalon Airport. Avalon, which wooed AirAsia with an extremely attractive deal, is hopeful of securing additional AirAsia services including Bangkok.
See related report from CAPA: Melbourne Avalon Airport: AirAsia X to spike new growth phase
Avalon should be high on the list for Thai AirAsia X as it considers additional destinations in Australia given that Thai Airways also has cut Melbourne-Bangkok from 14 to 11 frequencies. Sydney-Bangkok is similarly underserved following Thai’s reduction from 11 to seven weekly frequencies and the upcoming suspension from Emirates Airline, which is terminating its daily Sydney-Bangkok service in May-2019.
However, AirAsia has been vocal about the high cost of operating at Sydney Airport, prompting it to reduce capacity from Kuala Lumpur. Perth is an even less likely option for Thai AirAsia X given it is a smaller market and is the only Australia route that Thai Airways did not reduce in restructuring its Australia operation last October.
See related report: Thai Airways cuts Australia capacity to lowest level since 2006
Avalon would seem to be the favourite, particularly if the new Avalon-Kuala Lumpur service proves successful. The decision to go with Brisbane first could be partially driven by the fact that it is too early to fully assess AirAsia X’s performance in Avalon although the LCC has already stated it is above expectations.
CHART – The Thai Airways reductions from late last year and the upcoming Emirates Airline suspension has led to a nearly 40% drop in one-way weekly nonstop seat capacity from Australia to Bangkok. Qantas also serves this market with a daily service from Sydney while its LCC subsidiary Jetstar offers three weekly flights from MelbourneSource: CAPA – Centre for Aviation & OAG