Thai Airways Fed Up With Ongoing Price War

[george]

THAI fed up with ongoing price war

Business approach to be more proactive

BANGKOK: -- Thai Airways International seems to be running out of patience with the fare war lodged by competing airlines and is prepared to go into battle itself if the price-cutting doesn't cease.

``We have been a passive Mr Nice Guy for long enough and have been walked over by others. That needs to be changed,'' said Wallop Bhukkanasut, vice-president for sales and distribution.

Mr Wallop's statement signals a more proactive business approach being adopted by the national carrier to reverse a difficult operating picture marked by rocketing fuel prices and intensified competition, especially on the international routes.

``We will seek a peaceful solution with them (fare cutters), for the last time on a friendly basis, before we take further action,'' he said.

He did not name the airlines, but described them as being ``renegades'' and ``adversaries''.

Some of the carriers belong to Star Alliance, the world's largest airline alliance group, of which THAI was a founding member.

Rangsiman Mokkhasmit, THAI's area manager for Indochina, has been tasked to seek co-operation with problematic airlines to tackle a price war that is hurting the entire industry ``based on mutual respect''.

Industry analysts said one of the airlines to which Mr Wallop referred is Singapore Airlines, a fellow Star Alliance member with which THAI has a long love-hate relationship.

One SIA practice that has irked THAI is charging a much lower fuel surcharge than the Thai airline and others to make overall ticket prices lower.

Mr Wallop said there would be ``lots of surprises'' in the way THAI conducts its marketing in the new fiscal year that began on Oct 1.

What worries THAI is that its market share for outbound air travel from Thailand has dropped to around 40% from 50% in the past, being taken by competitors. ``That's unacceptable,'' he said.

Vasing Kittikul, THAI's executive vice-president for commercial affairs, said the carrier was adopting wide-ranging measures to minimise losses and boost revenue.

One of the measures is to do away with double ticket bookings and make major wholesale agents accountable for more prudent conduct, limiting passengers' no-shows and imposing tighter time limits for ticket issuing.

Acting president Somchainuk Engtrakul yesterday said spiralling fuel prices were the most critical factor for the airline.

He estimated that the airline's jet fuel bills would soar to 59 billion baht in the new fiscal year from around 40 billion baht in the year just ended, driven primarily by inflated prices and not so much higher consumption volume.

Mr Somchainuk indicated that the airline may hedge more oil purchases in the new operating year to protect itself from price volatility.

In the last fiscal year, about 30% of THAI's fuel supply was hedged, enabling the airline to enjoy savings of 300-400 million baht.

The airline's board has given management a mandate to hedge as much as 50% of its oil supply requirements.

The International Air Transport Association (IATA) recently revised upward its loss projection of the world's airline industry to $7.4 billion this year, due primarily to higher fuel prices.

Mr Somchainuk declined to say whether THAI would post higher or lower profit for the whole of fiscal 2005, but said he saw a healthy improvement in revenue for the last quarter from July to September.

THAI shares closed yesterday on the Stock Exchange of Thailand at 38.25 baht, up 25 satang, in trade worth 11.63 million baht.

--Bangkok Post 2005-10-23

[cdnvic]

So THAI, who has in the past tried to improve sales by increasing prices, is now threatening to lower prices if it doesn't get it's way?

Makes the rest of the country seem a bit less surreal in comparison don't it?

cv

[chuchok]

One of the measures is to do away with double ticket bookings and make major wholesale agents accountable for more prudent conduct, limiting passengers' no-shows and imposing tighter time limits for ticket issuing.

Yep, that'll show them.

[britmaveric]

Hmmm geting pissed off because of competition? Got to love TG - simply amazing!!!

[The_Moog]

As part of Star Alliance, both TG and Singapore Airlines use the same fuel-purchasing agreement that is negotiated with fuel providers en-bloc.

So their fuel prices should be comparable.

[ovenman]

Mr Wallop said there would be ``lots of surprises'' in the way THAI conducts its marketing in the new fiscal year that began on Oct 1.

I suppose the biggest surprise would be if TG took any tangible action at all.

[britmaveric]

Of course could do what Iceland does - only allows Iceland air to land or take off from Iceland.

[astral]

Of course could do what Iceland does - only allows Iceland air to land or take off from Iceland.

<{POST_SNAPBACK}>

That is a good idea.

Then they could save on all the money spent at Cobra Swamp............

Bit late now.

Did these guys learn anything when they did their MBA'a,

or is this just an idication of the qualilty of Thai graduates???????????

Edited October 23, 2005 by astral

[The_Moog]

Then they could save on all the money spent at Cobra Swamp............

TG is not an investor in the new airport.

The success or failure of the new airport will be reflected in the profit and loss account of the SET listed 'Airports of Thailand' (ticker symbol AOT).

International departure tax will rise to THB 700.

[ovenman]

Of course could do what Iceland does - only allows Iceland air to land or take off from Iceland.

I'm sure that such a proposal would get no argument from the poo-yai at THAI but doing so would run counter to the Bangkok as the aviation hub of the universe scheme.

[Pattaya_Fox]

Ofcourse Thai Airways is jealous of Singapore Airlines...

To travel with Singapore Airlines is fantastic. The service is better than any airline I have travelled with over the last 30 years.. ..the food is superior to Thai`s and the attitude of the staff is superb....the customer is king!

So stop winging Thai...get your act together like it used to be, and you may regain some of your old customers back...providing that you get your prices right.

[cclub75]

What worries THAI is that its market share for outbound air travel from Thailand has dropped to around 40% from 50% in the past, being taken by competitors. ``That's unacceptable,'' he said.

Indeed, it's unacceptable !

But they will have to live with it...

You were speaking about the management level... well this entire paper is a proof. A scary one.

I like very much the "threat" sentence : "We will seek a peaceful solution with them (fare cutters), for the last time on a friendly basis, before we take further action".

Ah good old times where have you gone ? We can feel he would like to do it "ancien thai way", with a 9 mm shoot, rigth ?

[marquess]

I agree with you about the prices, damned expensive!

[The_Moog]

Worth pointing out that when the discount local carriers imposed a fuel surcharge a couple of months ago, they all did so on the same day, same amount.

Observers pointed out that the obvious collusion seemed at odds with their competitive rivalry.

I hope Thai Airways fails in this mission - which seems aimed towards putting fare prices up.

[yeti]

THAI fed up with ongoing price war

``We will seek a peaceful solution with them (fare cutters), for the last time on a friendly basis, before we take further action,'' he said.

<{POST_SNAPBACK}>

An agreement with competitors to have fixed market privces and screw customers, that would be illegal in most countries.

[Rinrada]

Had a couple of better deals with TG all inclusive hols just in but for tic only they have not moved under around £600 apart from...w-e.

Sing is still on at £480...so

also from a mate at SAS on the star alliance section it looks as though Thai is mucking around again with their Air Miles award levels....

Following the World Wide Outcry(ok -squeek)after they chopped them completely from Economy classes W-V in the summer....low life keen-ocks etc.they turned round and reluctantly agreed to reimburse the offer awards at 50%.....now it seems that they have dropped them again and this time to 25%

as yet unconfirmed but will call them tomorrow for a comment.

Re ...levels L-N-E ..didnt even know they existed

(from SAS website)

Thai Airways Booking class You earn

First & Business F, A, P, C, D, J, Z 200%

Economy Y, B, H, M, Q, G, U*** 100%

Low economy K, T, S, V*, W* 25%

No points in L**, N, R, E

[taxexile]

can anyone explain exactly what all those ticket classes actually mean.

N,R,E,F,A,P,C, etc , etc.

[ovenman]

can anyone  explain exactly what all those ticket classes actually mean.N,R,E,F,A,P,C, etc , etc.

The actual meaning of any lettered fare class may vary from airline to airline although 'Y' usually indicates full-fare economy class, 'F' full-fare first class, and (I believe) 'C' full-fare business class. The other letter classes refer to fares that are discounted from full-fare and/or having various restrictions on a ticket such as pertaining to refunds, changes, and so on.

[ovenman]

Re ...levels L-N-E ..didnt even know they existed

Are these the levels in which award tickets are booked?

[otherstuff1957]

The way those TG execs were talking, it sounds like they are planing to drop a few matches in their competitors fuel tanks! Those quotes could have been straight out of one of the Godfather movies.

[opothai]

competition,

who has the gaul to compete against our major thai company unheard of , quickly pay the police something to pay the mafia something and the problem will go away and we can get back to what we do best creating hubs or crackdowns or taking over the media.

all this give me head ache

Edited October 24, 2005 by opothai

[The_Moog]

Those quotes could have been straight out of one of the Godfather movies.

Good point.

When will these clowns ever grow up?

[carlthailand]

If THAI cut their prices. Then the exec's won't have as much money to waste on their parties and own indulgences.

Looking around for airfares. Didn't even look twice at the price THAI offered Singapore and Cathay a lot cheaper and with better safety records to boot.

Now abt Iceland. It really wouldn't surprise me if THAI doesn't try to get this happening. I mean why not. Be up with all the other stupid "Lets get rid of the tourist" ideas they already have.

Really, is it me or has this last 12 months been one of class clown acts by departments and the head (No Avian Flu here) clown.

C

[Michelbkk]

If TG is very cheap, who's gonna use Air-Aisa?

[mrbojangles]

Did these guys learn anything when they did their MBA'a,

or is this just an idication of the qualilty of Thai graduates???????????

My thoughts, exactly

So stop winging Thai...get your act together like it used to be, and you may regain some of your old customers back...providing that you get your prices right.

Absolutely, i stopped using them and now, i don't even bother to waste my time getting a price from them. You know it's always going to more expensive.

[carlthailand]

Just adding more fuel to the fire

Jet blows tyres on landing

The Advertiser

26oct05

Thai Airways jet blew several tyres as it landed at Melbourne airport around midday today, Airservices Australia said.

All air traffic into and out of Melbourne airport has been brought to a standstill.

The plane was stranded at the intersection of two runways at the airport, a spokesman for the air traffic control agency said.

The Airbus A340 "landed heavily" and "damaged a number of wheels on landing", the spokesman said.

"There was a small fire in the undercarriage," he said.

Planes are being diverted to Adelaide and Avalon airports for the time being and engineers are looking at the under-carriage to see whether the plane can be towed.

So far, 12 planes had been diverted from the airport or delayed.

Carl

Don't think they'll ever convince me to use them.

[Rinrada]

Could easily make a comment about all the "hot air" from the new T.G.management team but in this case will reframe and just say Well Done to the pilots on a safe "airy"landing with no casualities ...