Originally Posted by
TorontoSingh
For those who are interested about this development, you can read the news in Thai (and use google to translate it) here:
http://www.manager.co.th/business/vi...=9550000082200
The article basically talks about the fact the Bangkok - Samui route is being discontinued as it has become unprofitable as a result of the landing fees being increased by PG owned USM airport. With TG planes being full almost every flight, I don't see how a fee increase from about $3,000 to about $5,000/flight can cause TG to be unprofitable on this route.
In general, TG is not run by meritocracy but cronism and this explains a lot on how they could lose money on a route like BKK-Samui with flights that are mostly fully packed. If the landing fee is really the issue, I don't see a good logical reason why TG is not investing to build its own airport in Samui.
TorontoSingh, thanks for sharing the updated info. However, I don't see a causality between a full flight and high profitability for airlines. I remember one issue of CNBC's Business Nation about American Airlines, and for a regular domestic flight AA could only reap a couple hundred bucks profit (even for a full flight), excluding all fixed and variable cost.
To your second point, which circles back to my aforementioned scenario, it would be very difficult for TG to break even through investing another airport in Koh Samui - no need to reinvent the wheel after every setback. At the end of the day, it's just a business decision for TG, although PG didn't play a noble game IMHO.