Acting THAI Airways Boss Reports Low Revenue

[BarryM]

Agree that TG is now uncompetitive. I'm squeezing the last drops out of my platinum ROP card, using up miles and upgrades etc.

In future it'll be Etihad and Even BA rather than TG to uk.

[stefb1964]

There's a crisis going on in the entire world. I work at Brussels National airport and I know for a fact that more companies in aviation environments do have the water reaching their lips for a long time already. Surely there are many factors having a part in the overall financial problems of these companies.

Landing rights to pay, extra fuel taxes, high docking fees depending on which gate and time needed, high rents for their offices at the airport buildings, high tax pressure on the staff's salaries, and so on....

Some companies would do better if they choose other airports within the same country but at lower costs.

If, for instance, TG would divert to Charleroi (in aviation also known as Brussles South), they would pay a lot less overall taxes there, while they'd have maybe even better facilities.

Tourists for sure would benefit from such a scenario. But who cares ? One would start to think that prestige is much more important.

Let me illustrate this with a very recent and practical example. Yesterday evening I was checking for a flight to London flying BA.

The fare I got was 20 €, but the taxes added raised as high as 130 €.... So my trip would cost me as much as 150 €... lol...

It looks like governments worldwide like to collect a lot of money on an easy pray, meaning you and me, while the air carriers struggle to survive.

[chooka]

I remember in the early 1970's the THAI stewardesses all wore white high heels, I used to think they looked so modern. I bought the '50 years anniversary' coffee cup in 2010. The THAI fare prices are high and now that there are other newer carriers, THAI risks looking like a dinosaur in some ways. I still fly THAI sometimes out of nostalgia and because it is friendly. It wouldn't surprise me if they were facing low revenue as the op says, they haven't really kept pace with changing times.

I remember in the early 1970's the THAI stewardesses all wore white high heels, I used to think they looked so modern.

The problem is that those airhostesses you saw in the 1970s are STILL working at TG , in the business class section. I travel biz class fairly often on TG and the hostesses up there must be 50 years old +++, and their service is less friendly and good than the newly recruited younger (hotter) 20 something hostesses who serve in economy class. Given that biz class makes most of the profit for any airline, and that the majority of biz class travelers are men, they are alienating a critical portion of their customer client base; unbelievable.

You haven't flown Qantas have you? Just check out the very rude grumpy old hoestesses with thier walking frames on Qantas then you have something to complain about. Thai Airways is a far better and cheaper airline than Qantas.

Agree Qantas without a doubt is the worst airline in the world and the most expensive with the worst inflight service. Thai airways can hold thier heads high as apposed to qantas. Well done Thai Airways keeping your costs to 1/2 of that of qantas and you could teach them a thing or two, keep up the good work.

Edited July 3, 2012 by chooka

[Wozzit]

The pundits can talk all they want about revenue per km flown, balance sheets and all the other accounting details. That means nothing to the paying customer whose need is to get from A to B as safely, comfortably and economically as possible. That is as true for most first and business class passengers as for those in economy.

As others have noted, the front end of the aircraft is the bit that produces the profits. TG’s product is now not just inferior to that offered by many other full-service carriers – it is close to being vastly inferior and it is more expensive. Years of neglect have taken their toll. I have recently flown business class on 747s which is more like other carriers’ economy class, apart from a bit more space and an extra course at meal time. Even the A340s diverted from the JFK and LAX routes that are now flying to Europe only have narrow angled-flat seating, when many other Asian carriers as well as the cheaper Middle-Eastern airlines have fully flat beds and far superior service. As for US flights, Korean, Asiana and others are streets ahead of TG.

Who wants to fly to Hong Kong on aging aircraft when Emirates has its daily A380 service with flat beds, excellent meals and wines, huge vdo screens and the most extensive entertainment system I have ever come across in the air? I returned from Taipei some months ago on an ageing TG Airbus with the original business class seating (minimal recline) and only one of the cabin staff who smiled. The rest looked and acted tired. So they had had a four-sector day and been working long hours! That is still no excuse for not smiling! As for the meal, I sent it all back – overcooked and quite revolting. To be fair, most of my TG flights have not been that bad. But until they invest much more on improving the in-flight product in their business cabins, I reckon TG will spiral into an even greater decline.

Edited July 4, 2012 by Wozzit

[marcjaiyenyen]

when you nearly double the price of a return flight inside 2 and half years your profits will go backwards, nothing wrong with greed , just dont take the MICKEY, maybe that is why qatar and eva and etihad are doing much better

Isn't the Thai way of doing business, if sales are falling then increase the prices to recoupe your losses?

you increase the price by 100% and they just loose even more monies, same with british airways, think they both should rethink there business plans , seems both are not working, maybe they should look at the business plans of Etihad Qatar and even Airasia !

[Reasonableman]

http://www.iata.org/whatwedo/Documents/economics/Taneja_Business_Models.pdf

One perspective on developing an adaptive business model for the modern airline industry.

[ginjag]

Yunia, Those air hostesses were employed not that long before the jumbo's came into service shows the ages of some aircraft, info on that from some of you whiz kids would be helpful. I'm a dead loss on the internet, too bleeding old to know the difference between facebook and Wikki whatever. Ha. How old are the oldest Thai jumbo's in service, and do they still operate the DC 10s ??

[SeaVisionBurma]

How old are the oldest Thai jumbo's in service, and do they still operate the DC 10s ??

Oldest Thai Airways 747's still in service have been flying since 1991:

Boeing 747 Active with Thai Airways

They stopped flying the DC-10's in 1998 - 14 years ago.

McDonnell Douglas DC-10's in Thai Airways - History

Note: they did have 4 MD-11's flying until mid 2006, they could have been confused for DC-10's by some people.

Source for above: www.airfleets.net

[geriatrickid]

In his farewell statement to employees on June 20, Piyasvasti said he was convinced that THAI could achieve this year's net-profit target of Bt6 billion, thanks chiefly to falling oil prices as well as revised marketing strategies and cost-cutting plans.

So obviously disingenuous and one of the lovely things about Thai journalism: when they lie, it's so obvious because, in a country that doesn't understand the social value of honesty, the ability to appear sincere is severely hampered. This article is a political whitewashing in the wake of the firing of THAI's only CEO that understood the importance of profit. THAI is another example of a bureaucratic failure to acknowledge the importance of basic economics in the management of an enterprise; it's a chronic problem among public companies worldwide and Thai companies in general.

The termination was justified and we are seeing the reason demonstrated again with the current results. IMO, these financial results are in large part because of the decisions the former CEO made. Keep in mind that the financial results in the quarter in which the CEO was terminated were not good and had been on a negative trend in the previous reports whilst the CEO was at the helm. Appreciably, some of the financial costs were not the fault of the former CEO. Fuel prices are a factor, but so are labour costs. TG has the same financial burden as do other legacy airlines. TG has a wage structure that is significantly higher than that of its local competitors such as Air Asia. It is also a full service airline. If TG adopted the tight cost control strategy of Air Asia, I expect more people on this forum would be up in arms complaining. TG could easily raise hundreds of millions of baht by adopting a fee for service approach. They can cut the airfares, but if you want to bring a bag, you pay. You want a meal in economy? You pay. You want to change a ticket? You pay a fee. The North American airlines did this and it made a difference to their balance sheets, but then it created nasty experiences like United, and American. I almost always pick TG over Air Asia for domestic flights because I like full service and it offers Royal Silk. In asia, there is a significant difference between the treatment of F/PJ/C/Z fare pax and everyone else.