Political Crisis in Thailand Hits Air Transport
Thailand’s air transport market continues to suffer from mounting political turmoil in the capital city Bangkok. On May 22, the Thai military confirmed that it has ousted the government, after declaring martial law on May 21. Top army general Prayuth Chan-ocha has promised political reforms after troops broke up negotiations between opposition and government parties.
Widely known as “Shutdown Bangkok,” anti-government protests have closed major road intersections throughout the city, including key routes to both Don Mueang International Airport and Suvarnabhumi International Airport. May 15 marked the latest violent outbreak, as gunmen opened fire on a group of protestors at an encampment using machine guns and detonating at least three grenades. A few hours later, protestors stormed the grounds of an air force compound reportedly housing acting Prime Minister Niwatthamrong Boonsongphaisan. Since November last year, protestors have squared off with government supporters over a long-standing dispute over who should hold office. A reported 27 people have died in the violence and 800 have been wounded.
On May 9 Thai budget carrier Nok Air released a statement on its website attributing a downturn in profit for the first quarter of this year to political instability. Nok reported a first-quarter profit of $1.25 million, down 90.2 percent from $12.8 million registered in the same period a year ago. The airline also blamed heightened competition in the domestic market as well as the depreciation of the Thai Baht.
The following day, Nok Air recommended on its Facebook page that passengers leave home two to three hours before flight time and to avoid traveling near the sites of demonstrations. Nok Air primarily serves the domestic market from its hub, Don Mueang, with one international flight to Yangon, Myanmar.
In February, Thai AirAsia X delayed its inaugural flight to later this year because of the political unrest. It remains unclear whether the instability will affect the launch of Nokscoot, a joint venture between Nok Air and Scoot, a low-cost, long-haul subsidiary established by Singapore Airlines. Nok’s director of international corporate communications, Shaun Son Pham, reported that NokScoot expects to launch service during the fourth quarter. Plans call for NokScoot initially to provide service to Tokyo.
Labeled the world’s most visited city in 2013, Bangkok attracts more than 20 million foreign visitors annually. However, the political crisis has contributed to a decrease in tourism this year, resulting in a hotel occupancy rate of about 50 percent compared with a seasonal norm closer to 90 percent. The economy has also taken a hit with a decline in consumption and private-sector investment. More than 45 nations have issued travel advisories as a result of the protests.