CHIANG MAI : Thai AirAsia (TAA) will open its third hub in Chiang Mai in January in a strategic move to cash in on potential new routes that have been largely overlooked by others.

The budget carrier on Jan 24 will begin with one flight each per week from the northern capital to Singapore and Hat Yai, before considering other domestic and international destinations.

SilkAir of Singapore already offers three non-stop flights a week from Singapore to Chiang Mai, but TAA will be the first low-cost operator, while it is pioneering the Chiang Mai-Hat Yai connection.

Because no budget airlines now operate from Chiang Mai, TAA chief executive Tassapon Bijleveld is predicting a high 85-90% load factor initially.

"We believe there is substantial demand ... to Singapore or Hat Yai but such demand was not catered to until we decided to jump in," he said yesterday.

Chiang Mai is a key tourist destination with about 5 million visitors a year, while Hat Yai is the key financial and trading city in southern Thailand, he noted.

Future TAA flights from Chiang Mai are being considered to Hong Kong, Macau, Kunming and Krabi, but the timing has yet to be determined.

"Let's see the result of our initial attempt to make Chiang Mai a hub, then we can see more clearly what are the next steps we will take," he said.

TAA will charge fares 20-30% lower than for full-service carriers to help build traffic. It is offering a promotional all-inclusive price starting from 690 one way to Hat Yai, route, and 1,490 baht to Singapore.

The airline in January will take delivery of a new Airbus A320 jet that will be based at Chiang Mai International Airport. Mr Tassapon said a second A320 may be stationed in Chiang Mai in April or May if demand is good.

TAA successfully launched Phuket as its second hub in 2009, opening a new market bypassing the traditional route through Bangkok's Suvarnabhumi Airport.

Writer: Boonsong Kositchotethana
* Published: 18/11/2010 at 12:00 AM
* Newspaper section: Business