Thai Tiger Airways To Rival Thai Airasia With Low-Cost Tickets

[webfact]

Thai Tiger Airways to provide low-cost seats, will be a rival to Thai AirAsia

By Nophakhun Limsamarnphun

The Nation

Thai Airways International's decision last week to form a new budget carrier with Singapore's Tiger Airways will shake up the low-cost airline industry in a big way.

The joint venture, Thai Tiger Airways, will be 51 per cent owned by THAI and its subsidiaries, and 49 per cent controlled by Tiger Airways.

Since Tiger Airways is 34 per cent held by Singapore Airlines, the deal marks the first time that THAI will work indirectly with one of its long-time competitors in the regional airline market.

In fact, both SIA and THAI have been hit hard by the rapid rise of Malaysia's AirAsia, whose low-cost carriers, including Thai AirAsia, have grabbed significant market shares.

THAI president Piyasvasti Amranand has said the flag carrier lost a considerable share of the low-cost airline market over the past several years despite Nok Air's presence.

Nok Air was formed as part of THAI's strategy to fend off competition in this market segment but the bid hasn't been a huge success.

Areephong Wongcha-um, a member of THAI's board of directors, said last week that the new joint venture with Tiger Airways would allow THAI to compete more effectively in the ultra-low-fare segment.

Thai Tiger Airways would not hurt Nok Air, whose fares will be higher.

In other words, THAI would focus on the premium market while Nok Air would aim at the mid-market and Thai Tiger would fight it out at the low end.

Uantchern Loh, a regional managing partner with consulting firm Deloitte & Touche, has said the 2008-09 global economic crisis posed a big challenge for airlines and hotels worldwide, due to cost-cutting pressures among corporate clients and holidaymakers.

"This crisis has reset everything," said the specialist on tourism and the airline industry.

In the case of Singapore Air-|lines, a similar strategy has been adopted, with Singapore Airlines positioned as the premium carrier while its subsidiary Silk Air has tapped markets similar to those of Nok Air.

In the lowest-fare segment, Tiger Airways will be its front-runner.

As for Thai Tiger Airways, it aims to serve destinations in Thailand and the region that are within a flight time of five hours, so Chiang Mai, Phuket, or Bali and Shanghai are all within its reach.

In the aftermath of the global economic crisis - also called the Great Recession because it's the worst since the 1930s - corporate clients and vacationers are much more price-conscious.

Loh, of Deloitte, said everyone now looks for the best deal, so |there is new segmentation in the |airline and hotel industries worldwide.

Take Holiday Inn as an example. During the depths of the economic crisis, many business travellers downgraded to the budget hotel chain, which is part of the Inter-Continental Group.

Then, Holiday Inn managed to improve some of its services to better satisfy its customers. Many of these customers are now reluctant to return to the more expensive five-star brands within the group.

A similar development is taking place in the airline industry, as evidenced by the set-up of Thai Tiger Airways and the emergence of three-tier airline services from premium and mid-range to the lowest-priced air tickets.

In the end, it's all about more competition and innovation.

-- The Nation 2010-08-09

[theoldgit]

I suspect there will be some good deals on offer from Thai Tiger Airways when they get going, hopefully with Air Asia offering some good headline fares in reply, I don't think AA will go down without a fight.

Edited August 9, 2010 by theoldgit

[relentless]

I suspect there will be some good deals on offer from Thai Tiger Airways when they get going, hopefully with Air Asia offering some good headline fares in reply, I don't thing AA will go down without a fight.

I for one hope that I can get some real low cost tickets to Chiang Mai and around Thailand/Vietnam too. Love to travel more soon.

[toybits]

This speaks volumes. Thai International is eating dirt on home ground.

AirAsia's advantage is that they are a private airline which is not subject to the kind of interferance TG gets from it's board members and other persons of influence.

Thai-Tiger has a lot of ground to cover before even coming close to becoming a competitor for AirAsia. My forecast is that AirAsia will run circles around TTA - unless something underhanded is done to curtail AA's success.

[dantilley]

In my opinion, one of the major disadvantages of Nok Air is that they fly in and out of Don Muang Airport. Hopefully Thai Tiger will realise this and not follow suit.

[SamritT]

<br />I suspect there will be some good deals on offer from Thai Tiger Airways when they get going, hopefully with Air Asia offering some good headline fares in reply, I don't think AA will go down without a fight.<br />

<br /><br /><br />

It is happening tonight. Check AA website.

[swisstouristpattaya]

LCC means lower salary for pilots and flight attendants.

many European airline did the same by creating a low cost company and they failed.

the best way is to concentrate on long haul flight

Edited August 9, 2010 by swisstouristpattaya

[theoldgit]

I suspect there will be some good deals on offer from Thai Tiger Airways when they get going, hopefully with Air Asia offering some good headline fares in reply, I don't think AA will go down without a fight.<br />

It is happening tonight. Check AA website.

Yes, I have already seen that, I think this is one of their regular offers as it's far too early for a head to head with the new kids on the block.

[whatsupdoc]

In my opinion, one of the major disadvantages of Nok Air is that they fly in and out of Don Muang Airport. Hopefully Thai Tiger will realise this and not follow suit.

In my opinion that is the big advantage of Nok.... It is faster to get downtown from Don Mueang than from Suwannabhumi.

[bangkokburning]

This will come to little or nothing unless SG takes the reins.

AA has been doing this for years and knows its business well. All this new airline can do is compete on price and there is little or nothing left on that bone.

Another blunder on Thai Airs part. Its a wonder how SG wants to be a part of this.

Hope they open new routes: Kathmandu is crying for competition but this is a mafia route by Royal Nepal and Thai.

Guess everyone has forgotten US150 a barrel oil.

[madmitch]

Air Asia has a very good businessman in Tony Fernandes running the show.

A Tiger/Thai joint venture won't have such a person.

I hope that Tiger are the dominant partner, despite Thai being 51% stakeholders, as the Singapore business model will probably be better than a Thai one, You only need to read the many negative comments on Thai Airways on this forum to know what I mean by this.

I really hope it is successful and keeps prices of air travel at an affordable level in a difficult economic climate.

[theoldgit]

I think the CEO is keen to break the governments influence on Thai Airways, and to stop it being their toy, if he is able to break these shackles then he might have a fighting chance of making a go of this venture.

[nisakiman]

In my opinion, one of the major disadvantages of Nok Air is that they fly in and out of Don Muang Airport. Hopefully Thai Tiger will realise this and not follow suit.

In my opinion that is the big advantage of Nok.... It is faster to get downtown from Don Mueang than from Suwannabhumi.

But a considerable disadvantage if you want to connect to an international flight, as many do.

[bud7]

If it's run by Thais, we will have to factor in the corruption cost and that will be the end of it.

I also hope that someone can find a way to challenge Bangkok Airways on the Siem Reap run, which is grossly overpriced, and I'm tired of having my knees jammed into the seat ahead of me!

[Wozzit]

In my opinion, one of the major disadvantages of Nok Air is that they fly in and out of Don Muang Airport. Hopefully Thai Tiger will realise this and not follow suit.

In my opinion that is the big advantage of Nok.... It is faster to get downtown from Don Mueang than from Suwannabhumi.

Agreed. I still maintain the government should keep Don Mueang as the low cost carrier hub. Even Tony Fernandez of AA wants that now, having originally been totally against it. Suvarnabhumi cannot absorb many more smallish aircraft that eat up runway space and have to load and unload on the tarmac because there aren't nearly enough ramp gates.