THAIL LAND AVIATION PROFILE

Understanding the Thailand to Australia Aviation Environment

This briefing has been prepared by the Tourism Austra Aviation & Economics Team, but was significantly alia assisted by the research of the Centre for Asia Pacific Av viation and data from Air Transport Intelligence, Bureau of Infrastructure, Transport and Regional Economic and Department of Immigration and Citizenship. cs

At a G Glance
Arrivals Growth
2007 2008(F) 2009(F) +12% +3% +5%

Direct Seats
2007 0.71mil % ch +45% Rank 8

Load Factors
2006 2007 Nat. Av. 74% 82% 78%

Major Carriers
Thai Airways 69%

Seasonal Peaks
January/ December

Aus. Ports Serviced

4/8

Origin Traffic
20% Thailand is a major hub for European traffic

( ) (F) Forecast. Source: Tourism Forecasting Committee, 2007 Issue 2 g ,

In 2007 Australia regained some of its Thai outboun market share that it had lost in recent years. This nd was partially due to the very strong growth in aviation capacity on the Thailand-Australia route, opening up new destinations and improving Au ustralias price competitiveness. Load factors also increased during this period reflecting strong deman for these services. However, a key aviation related nd challenge is to ensure there are sufficient seats a available for local Thai residents, particularly if the Australian dollar continues to appreciate against th Thai baht enticing more and more Australians to pp g he g travel to Thailand. In addition, strong growth in cap pacity from Thailand to neighbouring destinations is expected to intensify so demand for A Australia may soften in the short term. Coming into Australia
Bangkok-Sydney is the busiest route with around 60% of capacity bet tween these cities. Four different carriers currently operate on this route.

Prepared: June 2008 Feedback or Suggestions? Tel: +61 2 9361 1374 lfletcher@tourism.australia.com

Airlines on the Route

on this route. In 2007 the carrier gained back some market share at the expense of intermediate carriers. From 2007 onwards, Jetstar is onwards expected to become a key carrier on leisure routes between Thailand and Australia.

Share of Passengers - 200

Other 8% Jetstar 4% Qantas 5% ThaiThai Airways Airways 69% 69%

Airline Thai Airways Singapore Airlines British Airways Qantas

2003 70% 11% 4% 9% 0% 7% 100%

2004 64% 17% 3% 7% 0% 9% 100%

2005 62% 14% 4% 7% 0% 13% 100%

2006 62% 16% 4% 6% 1% 10% 100%

2007 69% 9% 5% 5% 4% 8% 100%

Britis Airways sh 5% Singapo Airlines ore 9%

Jetstar Other Total

Direct Capacity: Thailand to Australia

750

Oct 07: Thai Airways added 2 Bangkok-Sydne services ey Jul 07: Thai Airways dropped 5 wkly Brisbane se ervices Sydney Nov 06: Jetstar launched 3 Phuket-S and 3 Bangkok-Melbourne (one onto Syd) o Dec 06: Th hai Airways ad dded services

80

500

70

Seats Available per year (000)

250

Average Annual Load Factor (%)

60

In 2007, direct capacity on the ThailandThailand Australia route increased 45% year-on-year. This was primarily due to Jetstars new services as well as Thai Airways additional Sydney services. Load factors also increased strongly during this period reinforcing strong demand for these services . There is very little seasonality in direct services from Thailand to Australia compared to other source markets. This is partially because the aviation route is predominantly Australians traveling outbound to and beyond Thailand at all times of the year. April is the peak period for Thai arrivals to Australia.

0 Dec-91

Nov 92- Oct 97: Air NZ operated services

Dec-93 Dec-95 Dec-97 Dec-99 Capacity

Dec05-Jan0 Australian 06: Airlines ope erated services

Dec-01 Dec-03 Load Factors Dec-05 D 50 Dec-07

Bilateral Capacity Restrictions: There are currently binding capacity constraints between Thailand and Australia. Under the current air p y y g p y services agreement, there is approval for 35 frequencies per week (14 4,000 seats) with Australian carriers using 32% of their available capacity allocation and Thai carriers using 90%. There is a need for th bilateral agreement to be updated to allow Thai carriers the he opportunity to expand Australian services and regional package (i.e. t ability to operate unlimited international services outside the Sydney, Melbourne, Brisbane and Perth) should be made available. Bilateral talks are expected in the coming months.

Looking Ahead
Capacity on the Thailand-Australia aviation route is expected to con ntinue to grow in 2008 and 2009, albeit at a slower rate than in 2007. In April 2008 Thai Airways added two weekly Bangkok-Melbourne se ervices and upgraded its Perth services (to the larger and more modern B777). It is also expected that Thai tourists will increasingly travel beyond A Australias key gateways as a result of the recent Thai Airways/Virgin Blue interline agreement signed in February 2008. This agreement ai ims to provide seamless connectivity allowing Thai tourists to travel from Bangkok to Sydney, Melbourne, Brisbane or Perth on Thai Airwa and then onto a choice of 13 Australian destinations that Virgin ays Blue services (Adelaide, Canberra, Broome, Mackay, Rockhampton, M Maroochydore, Cairns, Townsville, Hobart, Launceston, Ballina, Coffs Harbour and the Gold Coast). This is an important development given that the bilateral agreement effectively restricts services to regional A t li i l Australia. d Thai Airways plans to increase its focus on long haul routes to avoid LCC competition. Capacity to Australian ports may continue to grow given Thai Airways has a range of long haul aircraft in its fleet and on order (including six A380 and eight A330) and the companys n financial outlook has improved. However, Thai Airways focus on long haul routes was announced before fuel prices hit record highs g (US$135 per barrel) so this may slow the carriers expansion plans. hai The strong Australian dollar is expected to remain an obstacle for Th inbound visitors despite Australia being one of the top destinations in the Thai tourists agenda along with Japan and China a. Th Th i t h d id d t t t th Don Muang I t Int ternational airport i t a l ti l i t into low cost t t terminal and thi may slow i l d this l The Thai government has decided not to convert the D M Thailands attraction of further low cost services (given Kuala Lumpu has recently fast-tracked construction of a low cost terminal). ur

Prepared: June 2008 Feedback or Suggestions? Tel: +61 2 9361 1374 lfletcher@tourism.australia.com