On 22 February, Strategic Airlines – Australia’s newest full service carrier – touched down in Phuket and three days later V Australia, also a relatively new carrier from Richard Branson’s Virgin Group, took off for the last time after less than two years servicing Phuket.

The trouble for Phuket is that Strategic also launched a Perth-Bali service which flies from Brisbane to Bali three times a week compared to once a week to Phuket, using an Airbus A330-200, featuring 30 business class seats and 243 economy class seats.

Strategic also operates Perth-Derby-Denpasar; Brisbane-Port Hedland-Denpasar and Brisbane-Townsville-Denpasar.

To compound the comparison with Bali, the A330-200 has fewer seats than the Boeing 777 of V Australia, which has more than 300 seats, making it the largest twin jet in the world.

So in terms of Phuket attracting more Australian visitors in 2011, the island has its work cut out. Already Australian visitors are being eclipsed in numbers during this high season by the Russians and Chinese, although the bulk of Australian tourists come in Phuket’s low season (May-October) when the winter weather at home forces them to look for suitable holiday spots. Generally, however, Australian visitors overall are in the top five each year.

Bali, of course, is closer than Phuket but it comes with conditions. While Thailand had its fair share of political problems in 2010, forcing many cancellations, Thailand is still projected as a relatively safe destination for tourists. This is borne out by the 2010 arrival figures, showing a total of 3.5 million arrivals, a 22 percent increase over the previous year.

This came with a massive boost from Russia and China, the latter starting direct flights with Hainan Airlines via Beijing, and the former with mainly large charter groups from Moscow. Traffic surpassed the 2007 peak year by 19 percent with a 28 percent increase over 2009.

Other international airlines directly servicing Phuket include Dragon Air (Hong Kong); Jetstar (Australia); AirAsia, Firefly and Malaysian Airlines (Malaysia); SilkAir and Tiger Airways (Singapore); AirAsia (Bali); Air Berlin (Germany); Qatar Airways (Doha, Middle East) via Kuala Lumpur and Asiana Airlines (South Korea). There are also numerous charter flights from Sweden, Taiwan, Japan, Russia and other parts of Europe.

Domestic flights bringing in connecting passengers from Bangkok include those on Thai Airways International, AirAsia, Bangkok Airways and Happy Air, a Phuket-owned start up that flies to Ranong.
Latest figures show Bali had almost 400,000 Australian visitors in the year to August, 2010, a 47.45 percent increase from the year before. Australians made up 23.83 percent of the overall tourist arrivals in Bali, reaching 1.67 million in totally January-August, 2010.

By comparison, between January-June Australian arrivals in Phuket were up 13 percent to 326,084, still a healthy increase, but considerably below Bali.

With Strategic, a former charter airline, looking to expand its international network, it will be intriguing to watch how the airline does on the Phuket route, especially as V Australia claimed it could not make enough profit on the route flying a B777.

This may be true, as the aircraft is slightly larger than the A330-200, and therefore costly to run on a route of only around 8-9 hours full of passengers in economy class, where the profit margin is much lower than business class.

It is a fact of life for airlines servicing tourist destinations like Phuket that the margin (or yield as it is called in the airline industry) is much lower because of the predominently economy class passenger numbers.

However, Phuket has some advantages over Bali to offset distance from Australia. For example, the Australian government often issues travel advisories against travelling to Bali because of the terrorist threat. Australians are particularly sensitive to this advice because of the 2002 Bali bombings which killed 88 Australians and wounded many more.

Such advisories were issued against Thailand last year because of the Red Shirt uprising, something that outraged Phuket tourist operators as the island was bundled in with a confrontation that was actually confined to a small part of Bangkok and was not emulated or repeated on Phuket, which was completely separated from the Bangkok violence.

In fact a campaign to foreign governments to be more judicious in how they word their advisories was started by one prominent Thailand hotlier.

Whatever the attractions, or distractions, however, it is fair to say that the more direct flights from Australia to Phuket that can be launched, the more competitive the island will be with Bali.