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The Impact of Low Cost Airlines to Airline Industry: An Experience of Thailand

Jurnal Ekonomi Malaysia

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Title The Impact of Low Cost Airlines to Airline Industry: An Experience of Thailand
 
Creator Suriya, Komsan
 
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Description ABSTRAKThe deregulation of airline industry of Thailand has allowed three low cost airlines (LCAS) to operate in domestic routes. This study explored the impact of LCAS to three stakeholders in airline industry, full-serviceairlines, airports and passengers. The main question was who gained or lost from LCAS. In answering the question, the demand for airline industry was estimated. The change in revenue of airlines and airports were considered as private benefits. The change in consumer's surplus, amountof money that passengers were willing to pay for the airfare but did not pay, was regarded as the social benefit. Comparison of benefits between the expansion and recession periods o f the airline industry were examined.Moreover: the change in traveling pattern ffom Thailand to Laos was also investigated. This study proved that, in the expansion period, LCAs were not harmful to fill-service airlines. In turn, they were important to the growth of the industry. However in the recession period, LCAs weregrowing at the expense of full-service airlines. For passengers, consumer's surplus was increased in the expansion period but decreased in the recession period due to higher airfare. Airports gained in both expansionand recession period. LCAS encouraged tourists to change their traveling pattern from Thailand to Laos via an indirect route, Bangkok - Udorn Thani - Nongkai - the Friendship Bridge instead of the direct route fromBangkok to Vientiane.Key words: Low Cost Airlines (LCAS); Airline Industry; Consumer's Surplus; Tourism; Greater Mekong Sub-region (GMS)
 
Publisher Universiti Kebangsaan Malaysia
 
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Date 2012-11-05
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
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Format application/pdf
 
Identifier http://ejournal.ukm.my/jem/article/view/1448
 
Source Jurnal Ekonomi Malaysia; Vol 43 (2009): Jurnal Ekonomi Malaysia
0126-1962
 
Language eng
 
Relation http://ejournal.ukm.my/jem/article/view/1448/1258
 
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