Thai Airways Considering Drastic Steps

[george]

Thai airways in U-turn over Phuket?

PHUKET: -- Phuket may benefit as THAI Airways ponders several measures to stem an alarming surge in ticket cancellations (10-20% in the last fortnight) and a plunge in new bookings triggered by Thailand's escalating political turmoil.

The Bangkok Post reports that the flag carrier is considering drastic steps such as offering international flights directly to Phuket and other Thai destinations outside Bangkok.

Also under consideration are fare discounts and allowing ticket holders bound for Thailand to switch to other foreign destinations within the airline's network with minimal fees.

In what appeared to some in Phuket as a kamikaze act last month, the national carrier hiked the price of an 'economy' class ticket on the Bangkok-Phuket route by 46%, while the Chiangmai-Phuket run was dealt a whopping 64% rise.

THAI's plight threatens to intensify as 47 countries have advised their citizens to reconsider any non-essential travel to Thailand, while 10 others are asking their nationals not to visit the country at all.

-- Phuket Gazette 2010-05-03

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[chiman]

That's just Economics 101 - Decreased Demand = Increased Price OR was it the other way around - oops

[givenall]

That's just Economics 101 - Decreased Demand = Increased Price OR was it the other way around - oops

You are right. It is economic 101 in Thailand. Increase prices if demand drops so you make up the differences by increase prices , Opps, demands drop again, ummm

[ozzieman05]

Thai wife tells me all the time

If no people use it must be to cheap = can not be any good

Increase the price = must be better = more people will buy

Don't we just love their logic

[ozzieman05]

Thai Air reduces price by 50%

Do not talk we put up 60% last week

[theoldgit]

The words "p*ss up" and "brewery" spring to mind.

[Redsunset]

That's just Economics 101 - Decreased Demand = Increased Price OR was it the other way around - oops

Wow, your take on economics is pretty sad.

[ExpatJ]

Thai wife tells me all the time

If no people use it must be to cheap = can not be any good

Increase the price = must be better = more people will buy

Don't we just love their logic

Actually, this is a recognized and valid economic model. Economist call it a 'veblen good'- some types of high-status goods, such as high-end wines designer goods and luxury cars, are Veblen goods, in that decreasing their prices decreases people's preference for buying them because they are no longer perceived as exclusive or high status products. So a price increase may increase that high status and perception of exclusivity, thereby making the good even more preferable.

Singapore airways is a good example i think- they offer a product at a higher price than competitors and get away with it.

The problem for Thai air is their product is not at the same quality level as Singapore air.

Edited May 3, 2010 by ExpatJ

[DagonKhan]

That's just Economics 101 - Decreased Demand = Increased Price OR was it the other way around - oops

Wow, your take on economics is pretty sad.

Whooosh!

[Gonzo the Face]

That's just Economics 101 - Decreased Demand = Increased Price OR was it the other way around - oops

You are right. It is economic 101 in Thailand. Increase prices if demand drops so you make up the differences by increase prices , Opps, demands drop again, ummm

Same as the condo market a few years ago...... can't sell the condo for 1M baht, at the end of the year, put the price up to 1.5 M Baht.....why, afterall you have more money in the place now...

Idiots..... could not see a wart on the end of their nose.

Life is hard enough people without working overtime to make things harder for yourself. Shooting oneself in the foot.... Brain would be a better location.

[Gonzo the Face]

The Veblen Effect in part.....

the snob effect: preference for goods because they are different from those commonly preferred; in other words, for consumers who want to use exclusive products, price is quality;

I think the key word here is different, in a positive way not a negative way as TG' history is perceived by the user.

the bandwagon effect: preference for a good increases as the number of people buying them increases;

It would take a Thai mentality to put the above into practice in the situation of Thai Airways.....

No wonder the country is on the verge of destruction.... but the birght side..... the baht gets stronger.

Edited May 3, 2010 by Gonzo the Face

[CHdiver]

Thai wife tells me all the time

If no people use it must be to cheap = can not be any good

Increase the price = must be better = more people will buy

Don't we just love their logic

Time to open a Beer Bar I think, selling Beer Chang for 1000 Baht. Must be the best Beer in Thailand according to the Thai Logic. I will make a roaring trade.

[h90]

That's just Economics 101 - Decreased Demand = Increased Price OR was it the other way around - oops

Of course!

Example: it costs 100.000 Baht to fly that airplane to Phuket.

there are 100 customer, so the costs are 1000 Baht per customer

Now demand drops, there are just 50 customer, so the new costs must be 2000 Baht

As the costs rise you must increase the price.

As there are evil foreign airline who don't follow the laws of orderly business you must ban them from flying domestic.

Sounds logic or?

[h90]

Thai wife tells me all the time

If no people use it must be to cheap = can not be any good

Increase the price = must be better = more people will buy

Don't we just love their logic

Time to open a Beer Bar I think, selling Beer Chang for 1000 Baht. Must be the best Beer in Thailand according to the Thai Logic. I will make a roaring trade.

Best would be you sell it in Germany for the double price than the usual German beer.

[KhunDave]

The Vleben effect is never going to work for them on the CNX route - running dodgy old A300s at double the ticket price of Air Asia's nice new A320s.

[laurentbkk]

Why Thai airways is much more expensive than many other regional airlines ? If they want to sell more they should lower their prices. I had experiences a huge difference in a one way ticket for some friends who were stuck in Thailand because of the Iceland volcano. The difference was amazing with Singapore air or Malaysia Airlines. That remind me the Toll way to Don muang , from 55 baht it went to 85 baht ,less customers and higher prices to avoid losing turn over. Change policy , have better service ,newer planes etc ... and people will come back.

[ExpatJ]

The Vleben effect is never going to work for them on the CNX route - running dodgy old A300s at double the ticket price of Air Asia's nice new A320s.

Agreed. If TG had a premium product- new airplanes, TVs in economy seats, younger air hostesses - then they could probably increase their prices even in the current market and go for the buisnessman/ premium tourists traveler. But they dont.

[givenall]

Thai wife tells me all the time

If no people use it must be to cheap = can not be any good

Increase the price = must be better = more people will buy

Don't we just love their logic

I guess that is why all my GF buy only expensive items.

Or it is because I am paying for those

[Motoon]

Very bad timing by TG and the increases are rather huge. I don't know if it was offcially announced but to me it seemed that this was done quietly. Luckily I was able to switch to BA for my weekly trip...

[stuandchris]

BKK to UK on Qatar airways 36,000thb. Thai air 160,000thb, guess why they are in trouble.

[ThailandTommy]

What do they expect? Really they are getting what they deserve, it wouldn't be so bad if you got value for money but you don't, for some reason they think that they can virtually charge what they want and give sub-standard service and stupid foreigners will still buy it!

I think this is a long over due wake up call for Thai Air.

[h90]

The Vleben effect is never going to work for them on the CNX route - running dodgy old A300s at double the ticket price of Air Asia's nice new A320s.

Agreed. If TG had a premium product- new airplanes, TVs in economy seats, younger air hostesses - then they could probably increase their prices even in the current market and go for the buisnessman/ premium tourists traveler. But they dont.

What has the age of the air hostesses to do with it?

I personally prefer older experienced well trained ones instead of beautiful chicken.

[hardy1943]

That's just Economics 101 - Decreased Demand = Increased Price OR was it the other way around - oops

Thai logig = increase price sky high while demand drops,

but then it is government operated.

Anyone suprised? THE BOYS IN BKK run the country same way

[dhrobertson]

Increasing economy fares by 50% is just stupid. I for one have voted with my feet.

You already have business class for people who want to pay more for a better service like me.

BTW the better service from BKK/HKT includes

1) No jet bridge at BKK. So have to clamber down stairs into a bloody bus

2) Wheel chair passengers have to be loaded with the service carts

3) No drinks, free or otherwise

4) Consistantly late service

5) Booze free lounge

Thai Air should be privitised immediately and be allowed to die quitely.

[laurentbkk]

The good thing is that nobody is obliged to fly with TG , there are enough others airlines to be chosen. I travel professionally with either Emirates or Singapore air ,yes you need to change airport but what is the best ? World crisis is not over yet and we need to save money so I dont mind to transit via another airport if its to save a lot . When TG offer double price than many other ,it should be time to re consider.

[yesdavy]

That's just Economics 101 - Decreased Demand = Increased Price OR was it the other way around - oops

No problem, just do like that furniture store I heard about, selling at 10% below cost to beat the competition and drive all the customers to his store. When asked about taking a loss on each sale, the owner said he would make it up on volume.

[yesdavy]

Why Thai airways is much more expensive than many other regional airlines ? If they want to sell more they should lower their prices. I had experiences a huge difference in a one way ticket for some friends who were stuck in Thailand because of the Iceland volcano. The difference was amazing with Singapore air or Malaysia Airlines. That remind me the Toll way to Don muang , from 55 baht it went to 85 baht ,less customers and higher prices to avoid losing turn over. Change policy , have better service ,newer planes etc ... and people will come back.

Are state operated businesses required to show a profit

[h90]

That's just Economics 101 - Decreased Demand = Increased Price OR was it the other way around - oops

No problem, just do like that furniture store I heard about, selling at 10% below cost to beat the competition and drive all the customers to his store. When asked about taking a loss on each sale, the owner said he would make it up on volume.

Well if the costs include, office, rental fee, staff, owners mercedes and Mia Noi and you make a price 10 % below your costs, it may make a profit at the end of the day if you have a big increase of sale, because your costs/piece are dropping.

Or more probable is that he just add 100 % instead of his 200 % profit and just tell you it is 10 % below costs.

[tharae]

The Vleben effect is never going to work for them on the CNX route - running dodgy old A300s at double the ticket price of Air Asia's nice new A320s.

Agreed. If TG had a premium product- new airplanes, TVs in economy seats, younger air hostesses - then they could probably increase their prices even in the current market and go for the buisnessman/ premium tourists traveler. But they dont.

About time you took to the air again. The last time I flew Thai (in January) they had new A330s with TVs in the back of the seats in economy.

It isn't the best airline in the world, but it's sure better than Quaint Arse. Not that it's much competition.

[Garry]

The Vleben effect is never going to work for them on the CNX route - running dodgy old A300s at double the ticket price of Air Asia's nice new A320s.

Agreed. If TG had a premium product- new airplanes, TVs in economy seats, younger air hostesses - then they could probably increase their prices even in the current market and go for the buisnessman/ premium tourists traveler. But they dont.

What has the age of the air hostesses to do with it?

I personally prefer older experienced well trained ones instead of beautiful chicken.

Think you may be on your own on this one mate...

Indeed, beautiful clumsy chicken thanks