Backlash for budget carriers
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“Passengers on low-cost airlines will worry about safety and security measures after the crash,” a source in the aviation industry was quoted saying.
OSK Investment Bank said the Phuket crash would affect low-cost carriers, particularly after a similar crash in Indonesia in January involving budget airline Adam Air.
“Although Thai AirAsia has not suffered a significant incident of this nature, we believe it will be affected as well, and it will reduce its fares in an effort to sustain its load factor,” OSK was quoted saying.
LCC leader AirAsia has a 49% stake in Thai AirAsia, one of three budget airlines operating in Thailand.
MIMB Investment Bank head of research Pong Teng Siew was quoted saying that in the short-term, passengers would be suspicious of budget airlines, although this was unlikely to last.
“Generally, AirAsia has a good reputation and no record of problems, so there will be little impact on the company in the longer term,” he was quoted saying.
Srihaphan Chumsai, deputy CEO of low-cost carrier Nok Air, agreed. He said the incident would affect the tourism industry only in the short-term.
“People might stop travelling on low-cost carriers, but not for a long time,” Srihaphan was quoted saying.
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