What can 99 Baht (US$ 2.50) buy in Thailand?
- 3 plates of Khauw Phat (fried rice)
- 20 bus trips in congested Bangkok
- 15 minute ride in a Tuk-Tuk taxi
- 2 simple burgers at Mac Donald
- Or a flight from Bangkok to Phuket.

"This is a dream. Now also I can fly to go home" says Pat, clutching her boyfriend's arm anxiously before boarding a flight from Bangkok to her hometown in northeastern Thailand. "Many of my friends also want to fly, just once in their lives," said Pat, who just spent 99 baht (US$ 2.50) on the fare for her first flight.

In Thailand, traveling by air is normally out of reach of the millions of Thais with low-income, but now 2 discount airlines: Thai AirAsia and One-Two-Go, are scrambling to attract new customers on their flights with special cut-price fares at roughly only a third of regular prices.

Thousands of people in Thailand, who never would have dreamed of spending money on expensive airfares for domestic travel, are now planning weekend trips to visit family and friends in destinations in Thailand that would normally take more than a day to reach by bus.

"I would like to fly too. I want to know what it feels like to be up-there," said Nui a 40-year old maid. "Out of my entire family, there has never been anyone who could afford to fly on an airplane before.", she added.

Aviation analysts say Thailand is potentially a vast market for discount airlines seeking to emulate the success in Europe of low-cost carriers such as EasyJet in Britain and Southwest Airlines in the United States.

Cut-price competition is set to further intensify for domestic flights in Thailand, when the country's biggest airline, Thai Airways International will launch its own budget carrier, Sky Asia, in the second quarter of this year.

"There is significant appetite for lower-price air-travel market," said UBS analyst Timothy Ross, pointing to a surge in Australian passenger numbers after the launch of Virgin Blue. "I think Thailand will be doing exactly the same," he said.

Transport Ministry figures showed that around 9% of the 74 million people in Thailand who used public transport in the year 2002, chose to travel by plane, while 77% chose to travel by train and another 15% took the bus to their destination.

Besides Thailand's huge potential local market, discount airline carriers are also setting their sights on the 10 million international tourists who flock to the country's beaches, temples and resorts each year.

Sell-out
Thai AirAsia kicked off its "Now Everyone Can Fly In Thailand" promotion last month by slashing prices for 20,000 one-way tickets to popular destinations such as Chiang Mai and Phuket for just 99 Baht (US$ 2,50), roughly only the cost of two McDonald's hamburgers in Bangkok.

AirAsia's flight tickets sold out within 2 days. "The response was overwhelming," said a Thai AirAsia ticket agent.

The discount airline, which aims to carry 1 million passengers and make a profit this year, is 50% owned by telecoms group Shin Corp, which was founded and owned by Prime Minister Thaksin Shinawatra and his family. Malaysian budget carrier AirAsia owns a 49% stake, while a Thai investor owns the remaining 1%.

"This is a new choice in traveling in Thailand," said Shin Executive Chairman Boonklee Plangsiri. Its cut-price rival One-Two-Go airline was launched by privately owned Orient Thai Airlines in December 2003.

Fighting off rivals
National carrier Thai Airways said it will focus on safety to attract passengers to its new discount airline, a cutting remark at Thai AirAsia, whose inaugural flight for Thailand's VIPs and reporters was forced to make an embarrassing emergency landing after a flap indicator on the airplane malfunctioned.

"We're not sure if people in Thailand who generally use buses will shift to travel by planes," said Thai Airways Chairman Thanong Bidaya. "But looking at the underlying trends, the Thai market for domestic flights is huge. Provincial businessmen traveling by train and bus could turn to budget air travel."

With big, deep-pocketed companies backing Thai AirAsia and Sky Asia, Thailand's smaller domestic airlines are increasingly nervous and analysts say they could be forced out of business if they do not quickly adjust to the new lower prices for domestic flights in Thailand.

Vikrom Aisiri, president of privately owned Phuket Airlines, says his 3-year-old company is still losing money and budget competition could turn the situation from bad to worse. "Low-cost airlines are a threat, but they are not likely to push Thailand's sky into chaos," Vikrom added. "Normally, it should take an airline at least 5-years to break even, but with budget airlines coming, our goal may be far away now."

Phuket Airlines said it has no plans to join the budget-price bandwagon, but hopes to fend off competition with special tour packages and new international routes.

But for Thai people, price will remain the crucial factor. "Whatever is cheap, I'll take that," said Niphon, 45, as he boarded a One-Two-Go flight with his family. "We don't care much about how clean the restrooms are or how beautiful the stewardesses are, the low price for the ticket is why we can fly now.", he added.