THAI Mulls Regional Airline

[webfact]

AVIATION

THAI mulls regional airline

By THE NATION

National carrier Thai Airways International is considering setting up a "regional airline" service to capture a share of the increasing number of passengers in this part of the world.

The company's board of directors recently sought approval from its executive board to conduct a feasibility study of such an operation.

The idea is not only to attract new customers but also to facilitate THAI's desire to become a fully integrated airline.

The plan has been submitted separately from the recent approval to set up Thai Tiger Airways, a joint venture between the company and Singapore-based budget airline Tiger Air.

A THAI source said the market still had room for further access and the carrier therefore needed to revise its strategy to accommodate such an opportunity.

"We foresee the launch of a multibrand strategy to capture a share of regional travellers, both businesspeople and tourists, to secondary markets in the region such as Indochina, South China and India," said the source, noting that they were important markets in support of THAI's international routes.

The large size of THAI's aircraft and high operating costs make it inconvenient to fly to every destination in the region. As a result, the company has to look at a more manageable plan and think more of business expansion to short-haul routes and secondary markets in the area, said the source.

"This has prompted the company to think of a full-service regional airline."

Under the plan, the company is considering small-body aircraft with 150-180 seats, focusing on economy and business classes. In addition, the entire fleet would use the same model to ensure efficient operation and sustainable costs.

The source said the idea would not hit THAI's own operations, as the regional airline would not fly on the same routes but would focus on secondary markets where there was no overcrowding.

If approved, the new carrier would open new routes such as Siem Reap, Guilin and Mandalay, besides facilitating connecting flights of THAI.

The regional airline would focus on routes entailing no more than six hours of flying time, and the national carrier's management would also allow the company to implement code sharing on ticket booking and frequent-flyer benefits.

However, Transport Minister Sophon Saram yesterday said he had not heard anything from THAI management about the idea for a regional airline.

"I don't understand the objective. The company could expand its market by seeking suitable new aircraft to facilitate the operation," he said.

The minister added that the establishment of Thai Tiger Air also had been designed to handle regional flights.

A source on THAI's executive board said the regional-airline idea had been taken off the company's agenda, as it already had an integrated service from its premium (THAI), regional (Nok Air) and budget (Thai Tiger Airways) services.

Meanwhile, THAI has opted for a public offering of up to 1 billion shares, the company said in a statement yesterday.

The bulk of the shares will be allocated to the Finance Ministry, which seeks to maintain its 51.03-per-cent stake, and to other existing shareholders.

The offer ratio will be announced on the day it reveals the offering price, as determined by the book-building method.

-- The Nation 2010-08-18

[haveaniceday]

Anyone know when "Thai Tiger" is starting domestic flight in Thailand ?

May give a little more competition to Air Asia. I hope they do the BKK - KL route.

I can't see Nok lasting to long then.

[Ricardo]

Oh dear, TG seems to be losing the plot here, considering starting a third subsidiary-airline, rather than focusing on getting things fixed with their main fleet and operation.

But just imagine how much waste & confusion might 'slip between the cracks', between the (potentially) four operations, with losses steadily mounting, and the different management-teams all blaming the others !

I was part of an airline management-team in the early-90s, which had similar problems, where the correct-decision taken by the board was to fix the core-product first, before letting middle-management switch their attention to other smaller business-opportunities. This was a pity, as we stopped our nascent low-cost scheduled-operation, and passed a couple of the spare planes to a guy called Stelios, who had a new start-up idea which proved to be a great commercial success.

But it was still the correct decision, to shore-up the rocky main-product first, and minimise all other distractions.

TG seem to be going in the opposite direction. One wonders why ?

[SamritT]

Nok will be dead before Thai Tiger fly. I am quite sure.

[Thailand]

Nok will be dead before Thai Tiger fly. I am quite sure.

The big bad Tiger is Noking on the door.