MARKET STRUCTURE AND STRATEGIC PRICING RELATIONSHIP OF LOW-COST AIRLINES IN THAILAND

Received: 30.04.2021; Revised: 29.06.2021, Accepted: 28.07.2021, Published Online: 10.08.2021

Nisara Paethrangsi

nisara.pa@ssru.ac.th

ORCID ID: orcid.org/0000-0003-1145-8212

Airline Business Program, College of Hospitality Industry Management,

Suan Sunandha Rajabhat University, Thailand

Kangwarn Phothong

kangwarn.ph@ssru.ac.th

Airline Business Program, College of Hospitality Industry Management,

Suan Sunandha Rajabhat University, Thailand

Theppaluk Komolvanij

theppaluk.ko@ssru.ac.th

ORCID ID: orcid.org/0000-0001-8824-7152

Airline Business Program, College of Hospitality Industry Management,

Suan Sunandha Rajabhat University, Thailand

Jiranuwat Swaspitchayaskun

jiranuwats@nu.ac.th

ORCID ID: orcid.org/0000-0003-4049-9929

Faculty of Humanities, Naresuan University, Phitsanulok, Thailand

Ramida Thanupant

ramida@nokair.com

Ground Quality Safety & Security Assurance, Nok Airlines Public Co., Ltd., Thailand

Abstract

The increasing of low lost airlines in Thailand has pushed for high competition and the COVID – 19 pandemic has a significant effect on the airline market. Demand for passenger air transportation has dramatically dropped. The government policies such as an alternative source of loans, loan guarantees, wage subsidies concerned with the survival of low- cost airline in Thailand. This research aims (1) to review the literature regarding the market structure of low-cost airlines, (2) to examine the determinants influencing the market structure of low-cost airlines in Thailand. Researcher used a mixed research method combining quantitative and qualitative techniques. For the quantitative research part, the sample comprised 400 airline passengers and employees selected via multi-stage sampling. A questionnaire was used to collect the data, I then analyzed them with a structural equation model. Data used in the research cover market information, price level, service, carriers’ characteristics, and marketing activities in 2020. In this paper, after the literature review, we found that the ban on international travel and the requirement of quarantine have put potential travelers off flying. Demand for both VFR (visiting friends and relative travel) and BSN (business travel) have fallen. Many low-cost airlines in Thailand offer low ticket fares. They expected to have gained more consumers, but some air travelers preferred to pay a lower price when travelling. Hence, they chose cheaper alternatives such as personal car and teleconference. This research proposed the four determinants influencing low-cost airline market structure, and the greatest determinant is external factor which contains of four key aspects; domestic and international economic situations, rules and regulations from regulator, financial government support, and other market competition. Results of this research will benefit low-cost airlines and agencies related to the aviation industry to plan strategies to develop and support airlines to survive amid the COVID-19 crisis.

Keywords: market structure, strategic pricing, low-cost airline, COVID-19 crisis