Understand Now Why Thai Is Most Almost Most Expensive Airline

[FarangBuddha]

My question is: Why is Thai Airways always the most expensive flight option, by a wide margin (often double the price), on just about every flight they serve? This question was nicely answered by the Chairman of Thai in a newspaper article today.

Apparently, all would be fine in the Thai airline market (and for Thai Airways itself) if those pesky low-cost carriers like Air Asia would just go away. Therefore, the new highly-paid chairman's idea for fighting the loss of market share to such "foreign" carriers (notwithstanding the fact that Thai Air Asia is majority Thai owned) is for [real] Thai air carriers to band together and fight them together. In fact, he proposes "much closer co-operation" in sharing routes and flight codes; and perhaps most importantly - avoid "unnecessary" competition. Ah...spoken like a true monopolist (which Thai Airways once was). In fact, he has already proposed such steps in a meeting with the chairman of one of Thailand's other major carriers, Bangkok Airways. [A step that would immediately bring him up on criminal anti-trust charges in the USA or Europe.]

In order to gain market share, there was no talk of reducing fares or rationalizing Thai's operations. There was no talk of efficiency gains, better fuel price hedging, or right-sizing of employee numbers or salaries (starting with his own of something like US$ 100,000 PER MONTH!). Only that Thai and other domestic airlines needed to collude among themselves to divvy up the market and maintain their ridiculously high prices (like US$ 200 prices for one-hour flights to Samui and Phenom Penh and B 18k flights to Bali (B 9-12k on other carriers).

The articles numbers on AA vs. Thais' operations was most telling:

Thai - 88 planes, 74 destinations, 26,000 employees.

Air Asia - 80 planes, 60 destinations, 6,500 employees!

So Thai has four times the number of employees to operate a few more planes and serve a few more destinations.

Edited November 28, 2009 by FarangBuddha

[rabcbroon]

Makes a lot of sense. Ovbiously why HomePro is so expensive. In the Uk (eg.) a similar store would have possibly 10 staff - Homepro looks to have a hundred or more. Why - who knows?

[rfukata]

a strategy for Thai airways very recently (from the CEO), Thai airways would streamline their employees over the age of 40 by means of early retirement/attrition, strengthen inflight services such as meals, increase and develop more code shares with other airlines to better position themselves thus increasing their profitability to satisfy their stock holders.

this will likely increase the 'ticket price' to customers after they invest in more development - also to increase their profit margins to meet their goals.

This will be a great challenge for Thai airways to achieve as global airlines face the same dilemma.

[KhunDave]

FB - Do you have a link to the article? Sounds like an interesting read.

[alant]

Makes a lot of sense. Ovbiously why HomePro is so expensive. In the Uk (eg.) a similar store would have possibly 10 staff - Homepro looks to have a hundred or more. Why - who knows?

maybe they earn a little less than in the uk, they are certainly more helpful than in the uk, good example? give me prices of cheaper items in the uk

[alant]

i dont fully agree with your conclusions although i feel you have some valid points.

there are many things that thai offer that i wouls not like to see vanish like for example the ablilty to do a through route, thai to chiang mai from say london i dont have to worry about checking my bags or anything they arrive at chiang mai, with air asia, if you take a bag at all as the alllowance is rather limited you have to get off at bangkok get your bag, go check in etc again oh and if you miss your flight dooing that it is tough luck.

these things do take resource and they cost.

i am not anti air asia, far from it anfd i rather like nok but there is a difference.

by the way, current non stop prices from the uk to thailand for jan feb are giving thai as cheapest option.

[Apecks]

Makes a lot of sense. Ovbiously why HomePro is so expensive. In the Uk (eg.) a similar store would have possibly 10 staff - Homepro looks to have a hundred or more. Why - who knows?

Easy really!

It all comes down to the ability to spin plates!

[livinthailandos]

Regarding this matter on thai airways

1. from what i hear thai airways still has to many close people in the organization that have highly connected more to the thai government or something similiar that prevents them from making any real necessary changes to the organization

2. Carriers like thai airways and other big names are at the moment losing money due to the fact that their prime money makers ( first class & business ) have heavy declined, some article i read from a CEO of one carriers said the only reason you have economy seats is just to break even and sometimes even then you don't break even at all

3. I gladly thank companies like air asia, for them they help boost tourism more globally by having lower fares. There's a good chance if we didn't have carriers similar to them I don't believe global tourism would have gone up over the last 5 years

4. All airlines bid of the price of jet fuel for future use, sometimes the bid helped them and sometimes it didn't

5. I realize airlines are in the business to make money, and that its a extremely hard business but from the original post it would seem these people are out of touch with reality and lacking a serious business plan.

6. you may have code sharing going on but in most other areas all major carriers are out for market share and to be in the top 5. Thai Airways will not be there even in the short term.

thai airways what a poor excuse for a business.

[Ricardo]

Regarding this matter on thai airways

1. from what i hear thai airways still has to many close people in the organization that have highly connected more to the thai government or something similiar that prevents them from making any real necessary changes to the organization

Agreed, there appear to be very many hangers-on, all travelling for free, or rather being paid-for by us paying-customers !

On the other hand, they have a better customer-care service & baggage-policy than air-asia, they are willing to through-book with other airlines, they are forced to operate relatively-uneconomic routes for political reasons and they offer more seat-space & better catering than low-cost carriers. Perhaps the market does support a higher-service carrier ?

But the management seem unable to stand up to the major shareholder, remember when they had to switch most domestic-flights back to Don Muang, when it was clearly a silly decision ? But they were told to ... and they did as they were told.

Perhaps this is the price Thai must pay, to eventually secure the financial-support they will need, for their overdue fleet-renewal !

[sibeymai]

If it wasn't for the fact that Thai's inflight service is reasonably good they wouldn't be able to fill their planes given that the hardware is quite old by the standards of their direct competitors.

[chiang mai]

Remember the "good" old days when Thai flight crew held two jobs, one job perhaps as a pilot and a second one as a senior manager in Head Office? Work the day job in the office to ensure control of the company politics/career advancement and in the evening go pilot a jumbo from BKK to LHR etc. All of that came unstuck and was thankfully changed when a flight carrying the then Miss World, en-route from Bangkok to Beijing, was found headed towards Delhi (or similar locations of the same magnitude).

[siam2007]

THAI AIR ASIA has 20 planes, not 80 !

[londonthai]

as to employees air asia has only 2 intercontinental flights (autralia, UK), the rest of them is in the region. On intercontinental flights you need far more crew (some are resting, while the ither are working) and than you have to stay at the destination for maintanance, it can be many hours.

thai air are flying larger planes than air asia, so serving many more passangers.

as to prices - I just got a ticket with thai LHR-bangkok, which was only £30 more expensive than stansted-KL (and than probably another £100 KL-BKK) and I got 40kg allowance + hand luggage of any weight + meals+drinks. The ticket can be changed and I earn airmiles.

[siam2007]

as to employees air asia has only 2 intercontinental flights (autralia, UK),....

not correct

they use big planes (A 330, 340) to all destinations served by AirAsia-X: Melbourne, Perth, Gold Coast, Tianjin, Hangzhou, London, AbuDhabi.

seven destinations, though not all are "intercontinental".....

[IMA_FARANG]

Makes a lot of sense. Ovbiously why HomePro is so expensive. In the Uk (eg.) a similar store would have possibly 10 staff - Homepro looks to have a hundred or more. Why - who knows?

1.Yes Thai is overloaded with employees who are "friends" of higher ups and politicians...always has been. It's also a government airline....so efficiency isn't one of their strong points

2. I keep telling people, because I often fly Thai from Athens to Bangkok, that I can get a Thai ticket at 75% from a travel agent here in Greece of what Thai prices are online. I guess nobody believes me? Thai does much of it's business through agents and NOT online.

2a. Yes I could go from Athens to London and get one of the discount flights from there to BKK...but the savings would be taken up by the Athens to London flight.

3. In the U.K. 1 HomePro employee would work at best 40 hours a week....and would get 3 times the salary of a Thai employee in Bangkok. The Thai would have a 60 hour work week for that one-third salary also.

[MrHammer]

Thai Airways is not always more expensive. In fact, they are cheaper to fly with Bangkok - Udon Thani, than their own low cost carrier Nok Air. They also frequently have promotions that beat other airlines for Europe-Bangkok return. For some real sweet deals check out their Super Deal fares, which are short notice fares. Right now, you can get Bangkok-Ho Chi Minh return on BUSINESS class for 10,000 baht. There's also frequent fares to Korea return for 6000 baht. Great deals!

I do think their service is appalling, but not worse than other semi-government monopolies around the world.

[surangw]

keeping the advertised price high, makes discounts seem like a bargin.

[321niti123]

as to employees air asia has only 2 intercontinental flights (autralia, UK),....

not correct

they use big planes (A 330, 340) to all destinations served by AirAsia-X: Melbourne, Perth, Gold Coast, Tianjin, Hangzhou, London, AbuDhabi.

seven destinations, though not all are "intercontinental".....

Which is still only australia[Melbourne, Perth, Gold Coast] and UK [London]

Hangzhou is in china therefore still in the same continent

and AbuDhabi is in UAE which is in the middle east which is technically Asia

That makes london thai correct

--> proving that the "not correct" statement made by siam 2007 is NOT CORRECT

[geriatrickid]

TG needs to adapt fast.

There is something terribly wrong when I get get a round trip flight HKT-SIN for approx. 4500 baht on Air Asia, but see best available fares of 20,000 baht+ fares from Silk Air and Thai Airways. I will fly business on long hauls but for a short hauls I am price sensitive because there is almost no benefit from paying a premium fare on Silk or TG.

TG still doesn't get it, that smart flyers don't see the benefit of taking TG on some routes which double or triple travel time, and that provide nothing that justifies paying 3-5X another airline's fare. Silk can get away with it because it's a feeder airline for one of the world's best airlines, SQ. However, TG with its poor on time performance, decrepit fleet and increasingly unmotivated morose air and ground staff has nothing to offer. I can fly on ANA or UA to NRT for 25% less than on TG. The food is no worse, UA is always on time, ANA is helpful, and TG is pathetic all around.

Maybe Mr. Chairman needs to get out and walk around the airports and talk to the PAX. He might learn something.

[ThaiSunshine]

3 months ago I was in Copenhagen.

We checked the flight prices for a direct flight with both Thai Airways, SAS - Scandinavian Airlines System, British Airways and Air France....and Thai Airways was far the cheapest....so no complaints from me

[SantiSuk]

3 months ago I was in Copenhagen.

We checked the flight prices for a direct flight with both Thai Airways, SAS - Scandinavian Airlines System, British Airways and Air France....and Thai Airways was far the cheapest....so no complaints from me

Yes - they are having to drop the prices significantly on the Europe to BKK routes. My guess is that travelers are deserting them in droves, having realised that you get ancient planes (hellishly uncomfortable lumpy seats) with prehistoric in-flight entertainment. The Middle East indirect carriers with their new fleets have been cleaning up in the last few years.

The premium for a direct Thai flight over the average middle east carrier has however now fallen to £100 to £150, which just about makes the direct flight worthwhile in my view since I can live without IFE and hate the interruption a Middle east flight brings.

Charming Thai staff and sensible baggage allowances are 2 plusses for Thai on international routes. Domestically Thai's prices are a joke and I hope they do not use scullduggery to get Air Asia off the Ubon route. Long live competition.

[MickeyM]

A major cost issue on Domestic flights: Crew overnight stays after a one hour flight. (Possibly a Union issue, but extravagant).

[endure]

3 months ago I was in Copenhagen.

We checked the flight prices for a direct flight with both Thai Airways, SAS - Scandinavian Airlines System, British Airways and Air France....and Thai Airways was far the cheapest....so no complaints from me

Yes - they are having to drop the prices significantly on the Europe to BKK routes. My guess is that travelers are deserting them in droves, having realised that you get ancient planes (hellishly uncomfortable lumpy seats) with prehistoric in-flight entertainment. The Middle East indirect carriers with their new fleets have been cleaning up in the last few years.

The premium for a direct Thai flight over the average middle east carrier has however now fallen to £100 to £150, which just about makes the direct flight worthwhile in my view since I can live without IFE and hate the interruption a Middle east flight brings.

Charming Thai staff and sensible baggage allowances are 2 plusses for Thai on international routes. Domestically Thai's prices are a joke and I hope they do not use scullduggery to get Air Asia off the Ubon route. Long live competition.

Emirates have just upped all their baggage allowances by 10 kilos so it's now economy at 30k, business at 40k and 1st at 50k. They're cheaper than Thai and they fly the A380 into BKK.

[antony77]

Airfrance Bangkok/ Ho Chin Minh was one third the price of Thai!!

[LivinLOS]

Makes a lot of sense. Ovbiously why HomePro is so expensive. In the Uk (eg.) a similar store would have possibly 10 staff - Homepro looks to have a hundred or more. Why - who knows?

High staffing is due to the actual efficiency of said staff..

Also with high staff levels it means it covers the basic unreliability of people not turning too. Ever seen a building site just vanish as soon as its rice harvest time !!

[jackr]

Homepro looks to have a hundred or more. Why - who knows?

Because the average Thai customer needs to be mollycoddled and don't know what they're looking at.

give me prices of cheaper items in the uk

Most of the higher end tools in Home Pro are equal to, or more expensive than, those in the UK. Why would they be cheaper?

[backsoon]

Makes a lot of sense. Ovbiously why HomePro is so expensive. In the Uk (eg.) a similar store would have possibly 10 staff - Homepro looks to have a hundred or more. Why - who knows?

1.Yes Thai is overloaded with employees who are "friends" of higher ups and politicians...always has been. It's also a government airline....so efficiency isn't one of their strong points

2. I keep telling people, because I often fly Thai from Athens to Bangkok, that I can get a Thai ticket at 75% from a travel agent here in Greece of what Thai prices are online. I guess nobody believes me? Thai does much of it's business through agents and NOT online.

2a. Yes I could go from Athens to London and get one of the discount flights from there to BKK...but the savings would be taken up by the Athens to London flight.

3. In the U.K. 1 HomePro employee would work at best 40 hours a week....and would get 3 times the salary of a Thai employee in Bangkok. The Thai would have a 60 hour work week for that one-third salary also.

I have no beef against Thai Airways, or any other major International aircarrier.

I have flown Thai, Qantas, Lufthansa, Alitalia, British, TransAm, AirFrance, Lauda, Iberia and many others. I have no allegiance to any. Just pick-up the best deal offered.

My personal impression is: Best Service goes to Qantas and Thai. The worst - Lufthansa (always makes me feel like flying Luftwaffe).

What I am really peeved over is this:

How, for the love of God, did we arrive to the stage when an advertised price is 30% of the total cost???? I remember the time when departure tax, airport tax, all additional fees and charges fitted well under 20 bucks.

What is happening to us? And who is doing this? The Freaking Mobs (airport, governments, Insurance Coys, Security, etc. have highjacked the aviation).

Can somebody explain these things to me without reverting to Global warming, World Economic crisis and War on Terrorism? Because the above three things are used to explain everything, from Bird Flu, to Pig Flu, to why Pigs Fly.

[egg]

l use Thai Air regularly to fly to Oz (Brisbane), the planes are crap the food is the same , the inflight service is good, the inflight entertainment is crap, but it is the only direct flight to Brisbane or Melb and for the extra 3,000bt it is better than wasting time in KL or Singapore , etc , so for 9 hours if l can sleep it is worth the extra baht .

cheers

egg

[fishfly]

By reading this thread you can see that Thai is cheaper on some routes and more expensive on others. We just flew Thai from Bali to BKK return for cheaper than AirAsia. No complaints for that.

[KhunDave]

The Chairman is showing some duplicity here I think. Only a couple of weeks ago he was in London seeking investment, and gave an interview to the BBC saying how he wanted to sweep the nepotism and political interference out of TG. Now he is quoted as wanting to form a cartel with "Thai" airlines to fight the allegedly foreign threat from Air Asia.

This insular, nationalistic attitude is exactly what is wrong with Thai Airways and indeed much of Thailand's view of the outside world. Unless/until the fact that globalisation cannot be stopped is faced up to, gradual long-term decline is all that lies ahead.