Thai carrier Bangkok Airways has recently announced plans to further expand its activities in the northern part of the country by offering non-stop flights from Bangkok’s Suvarnabhumi International Airport to Chiang Rai, the northernmost large city in Thailand. The airline will offer a twice daily link between the two cities from March 28, 2014 using a 162-seat Airbus A320.

Founded by Phaya Mengrai in 1262 as part of the Lao-Thai Lanna kingdom, Chiang Rai didn't become a Siamese territory until 1786, then a province in 1910. It is essentially a service city for the surrounding province and only has a relatively small population of 200,000 residents. The city has emerged as a popular northern Thailand alternative tourist base to the larger Chiang Mai, while it also acts as a strategic gateway to neighboring countries such as the Republic of the Union of Myanmar, the Lao People's Democratic Republic as well as the southernmost part of China.

“We see Chiang Rai as another potential, yet competitive market in Thailand,” said Puttipong Prasarttong-Osoth, president, Bangkok Airways. “We look to cement our position in the increasingly competitive Thai market. We are confident that with our strong reputation of offering a boutique flying experience for our passengers, Bangkok Airways will become a leading player in this market.”

Bangkok Airways will compete directly with national carrier Thai Airways International on the domestic route; the latter offering three flights per day during the summer schedule and four over the winter period. Low-cost carriers Nok Air and Thai AirAsia also offer flights to Chiang Rai from Bangkok’s Don Muang Airport with each offering up to five flights per day.

In the analysis below we look in greater detail at seat capacity in this domestic market and O&D demand on the city pair. With the arrival of Bangkok Airways and capacity growth among existing operators, capacity from Bangkok to Chiang Rai will rise 36.7 per cent this year, with available seats almost doubling over the past five years (up 84.9 per cent). The data shows that bi-directional O&D demand on the city pairing rose 11.4 per cent in 2013 up from around 785,000 in 2012 to approximately 875,000 last year.

Meanwhile, to support its operations, Bangkok Airways has leased an Airbus A319 from European carrier Bulgaria Air during the current winter schedule. The aircraft entered service with the Thai carrier in December 2013 and will continue to operate on its routes until March 29, 2014. According to the Bangkok Airways' flight schedule the aircraft is deployed on its daily Bangkok - Mandalay route and on two of its four daily flights on the Bangkok - Phnom Penh link.