THAI Smile set for Luang Prabang launch on Sunday

The oligopoly over the Bangkok-Luang Prabang air route is being broken up after Laos allowed a third airline, THAI Smile, to operate regular services starting on Sunday.

The touristic route has been dominated by Bangkok Airways since October 2002, with state-owned Lao Airlines the other operator on the sector.

The entry of the budget subsidiary of Thai Airways International is changing the market landscape. It will serve the route with the A320 jet with 174 seats, while Bangkok Airways and Lao Airlines use slower and smaller ATR-72 turboprop aircraft with 70 seats.

THAI Smile is offering a promotional round-trip fare starting at 7,300 baht, inclusive of taxes and surcharges, about half what the other two airlines are charging.

However, the number of cheap seats is limited, while tickets are only valid for 14 days and cannot be used for travel from Dec 27-31.

THAI Smile will operate four flights a week from Suvarnabhumi airport to Luang Prabang on Tuesday, Friday, Saturday and Sunday .

Bangkok Airways offers two flights per day on the route, while Lao Airlines has one daily service.

While welcoming more airlines to operate to and from the Unesco World Heritage City to boost its tourism, Lao aviation authorities continue to close the door on low-cost carriers (LCCs) that want to operate flights to capital Vientiane from Bangkok, the route that commands most air traffic.

In barring LCCs, Laos is protecting the flag carrier Lao Airlines and, to a lesser extent, the privately owned Lao Central Airlines, in the knowledge that budget airlines will embark on aggressive fare competition, executives said.

Lao authorities do not view Thai Airways and Bangkok Airways as a major threat to their airlines as they are full-service airlines.

They have also indicated to LCCs including Thai AirAsia that the Bangkok-Vientiane route will be open to them by 2015 as Laos embraces the open-sky policy under the Asean Economic Community.

Laos has sought to boost international tourists who spend more money than visitors from neighbouring Asean countries.

According to its Ministry of Information, Culture and Tourism, more than 3.3 million tourists visited Laos last year, injecting US$513.5 million into the economy.

But 2.8 million, or about 84% of arrivals, were from Southeast Asia with an average length of stay of one to three nights.

Last year, one million Thais visited Laos, staying just one night on average and generating $21 million in revenue.