Thai Airways - Making Money On The Lhr Bkk Flight?

[cigar7]

I flew into BKK on TG911 on April 3, 2013. The economy section, on this massive 747, was only 30% occupied. Basically everyone had 3 or 4 seats. How can they make money on such low passenger volumes?

[NanLaew]

And some of their twice daily flights are overbooked, depending on seasonal travel needs, holidays, promotions, etc..

As long as TG has two landing slots at LHR, they will fly planes on them regardless of passenger load. A single Heathrow landing slot has a market value of around $30 million.

Edited May 1, 2013 by NanLaew

[hands22]

I flew a few times with Thai Airways from Singapore and they were always full! Quite happy with them really though the cabin was always freezing.

[pfunk]

My flights to LHR have nearly always been full both in Business & Economy. I'm flying to the UK in June and couldn't book a seat for less than 45,000 THB so will fly Qatar instead. At that kind of yield, I imagine they are making good money - especially combined with the amount of freight that these flights carry. On one flight last year, I saw a BMW being loaded into the cargo hold! Whether the flight is profitable depends as much on the cargo loads and passenger yields as much as the load factor. They'll do much better with a 70% load at 45,000 THB a ticket than a 90% load at 25,000 THB a ticket.

One flight does not make an accurate sample size. Loads vary from day to day and season to season but I'd be very surprised if they're losing money on this route. If they were, they'd like sell one of their two slot pairs and put the A380 on the route which has a much lower cost per seat mile.

[uptheos]

I find Thai Air way overpriced for what they offer. Non stop I much prefer EVA, which is way cheaper and (IMO) better

[NanLaew]

...

One flight does not make an accurate sample size. Loads vary from day to day and season to season but I'd be very surprised if they're losing money on this route. If they were, they'd like sell one of their two slot pairs and put the A380 on the route which has a much lower cost per seat mile.

THAI is reported to be planning using the A380 on the LHR route which does suggest that they are confident of filling the extra seats. I would imagine the 747 would be on the slot with the lowest average load factor and the A380 on the other. Which one is which is dabatable but the one that leaves BKK around midnight and arrives LHR at dawn and turns around with a late morning departure from LHR is the only one I have flown and it was always pretty full.

[pfunk]

THAI is reported to be planning using the A380 on the LHR route which does suggest that they are confident of filling the extra seats. I would imagine the 747 would be on the slot with the lowest average load factor and the A380 on the other. Which one is which is dabatable but the one that leaves BKK around midnight and arrives LHR at dawn and turns around with a late morning departure from LHR is the only one I have flown and it was always pretty full.

If they do choose to use it on the LHR route, I agree that it's likely the midnight flight from BKK, noon departure from LHR. During slower times when they downgauge one of the flights to the A340-600, they keep the 747 on this flight. It will be interesting to see if they do use the A380, though. FRA and CDG are more obvious choices for the short term since FRA is a Star Alliance hub and better positioned for connections within Europe and CDG is a high-demand airport that only has one flight.

When all six come in to the fleet, though, LHR would be an obvious choice. I love the A380 but I'm not sure THAI really needs it and it was more likely a political purchase to keep up with the neighbours (Singapore and Malaysian). Hopefully they can find enough profitable destinations to use them. I guess if they struggle to, they can always cram 800 economy seats in and fly them to Scandinavia ;-)

[cigar7]

I have ticket June 17 for the Thai Airways A380 flight BKK to Frankfurt. I wonder if the load factor is going 25% again?

[notbkk]

To the op: I maybe wrong, but you obviously don't fly a lot. It depends on the season both in the UK and Thailand. Having been in the airline industry all my life, I know. And, Thai will never go bust as it's a government sponsored airline..

[socrates28]

I think Thai Airways have missed a trick not including Premium Economy on their LHR-BKK flight

[NanLaew]

I think Thai Airways have missed a trick not including Premium Economy on their LHR-BKK flight

Does THAI have Premium Economy on any planes/sectors? Their ancient online booking has higher-priced fares listed as Premium Economy but I thought that meant it was a more expensive ticket due to less restrictions. I can't say I have noted any areas of Coach seating with bigger seat pitch and different, more comfy seats which I reckon is real Premium Economy. It's either First, Business or Coach ie, 3 basic seating configurations.

[pfunk]

Does THAI have Premium Economy on any planes/sectors? Their ancient online booking has higher-priced fares listed as Premium Economy but I thought that meant it was a more expensive ticket due to less restrictions. I can't say I have noted any areas of Coach seating with bigger seat pitch and different, more comfy seats which I reckon is real Premium Economy. It's either First, Business or Coach ie, 3 basic seating configurations.

I think Thai Airways have missed a trick not including Premium Economy on their LHR-BKK flight

They do/did but online on flights on the old configuration 747-400s that flew mostly on the Scandinavia routes. They used the old First Class seats as Business and the old Business as Premium Economy. Scandinavia is notoriously bad for yields (little premium class demand) so they were able to get away with this.

I think all these aircraft have now either been retired or upgraded to the new cabins (seatback PTVs, new Business/First) but someone who flies the Oslo/Copenhagen/Stockholm routes would know better than me.

[tw25rw]

I think Thai Airways have missed a trick not including Premium Economy on their LHR-BKK flight

They have certainly lost my business.. Last three return flights have been on EVA even though it meant giving up my ROP Gold.

[tw25rw]

I think Thai Airways have missed a trick not including Premium Economy on their LHR-BKK flight

Does THAI have Premium Economy on any planes/sectors? Their ancient online booking has higher-priced fares listed as Premium Economy but I thought that meant it was a more expensive ticket due to less restrictions. I can't say I have noted any areas of Coach seating with bigger seat pitch and different, more comfy seats which I reckon is real Premium Economy. It's either First, Business or Coach ie, 3 basic seating configurations.

Their A340-500s that flew non-stop to LAX had similar PE seats to EVA, but I think they are parked now as they try to offload them.

Those seats should be the bare minimum standard for a long haul seat IMO.

[breadbin]

Thai always pretty full when I fly, last time full ish but I got 4 centre seats to myself.

Thai not that much more than Eva now and IMO Thai better service.

[lomatopo]

How can they make money on such low passenger volumes?

They can't.

With loads less than say ~ 70% CASM > RASM.

Most airlines now have a lot more seasonality on city-pairs with more than one daily. They drop the second flight during less than peak season and re-allocate the aircraft, or take it off line.

Edited May 9, 2013 by lomatopo

[lomatopo]

Seatmap for TG 911, LHR-BKK 9 May 2013.

Seatmaps are not an accurate indication of loads as some/many travelers may have a ticketed reservation but no seat assignment.

[lomatopo]

I have ticket June 17 for the Thai Airways A380 flight BKK to Frankfurt. I wonder if the load factor is going 25% again?

[lomatopo]

And some of their twice daily flights are overbooked, depending on seasonal travel needs, holidays, promotions, etc..

As long as TG has two landing slots at LHR, they will fly planes on them regardless of passenger load. A single Heathrow landing slot has a market value of around $30 million.

This is certainly a factor, but at some point it may be better to utilize a single slot with a 380 - most of the traffic is O/D - and lease the slot without losing much revenue/capacity - other than premium cabin that is?

Also, I don't think TG has any (non-stop) code-shares for BKK-LHR?

Edited May 9, 2013 by lomatopo

[Langsuan Man]

TG will never make money until the reign in their counter staff from giving every Thai who know someone an upgrade

[lomatopo]

TG will never make money until the reign in their counter staff from giving every Thai who know someone an upgrade

I believe Thai Airways reported a 6.229 BILLION Baht net income for the year ending 12/31/12, or are you referring just to certain routes? If the latter, I'd submit they would need to do a bit more than reign in comp/op-ups, as those folks probably wouldn't pony up the extra cost (revenue) for J or P anyway. So no chance for increased (/lost) revenue.

As NanLaew has highlighted, the desire to maintain two dailies to a high profile capital like LHR - two dailies to FRA makes sense as someone pointed out *A connections intra-Europe - utilizes both slots and also reinforces that notion of schedule reliability which does go a ways towards maintaining brand loyalty. There may also be some significant corporate contracts in place which require certain schedules? And I'm not sure how easy it is, or if it is even allowed, to lease out a slot. A carrier servicing the North American markets might want to add another daily during their summer/peak season. Also, the airline industry is still highly regulated and there may be some issues re: exactly which carriers could even be eligible for leasing a slot. I was never sure why TG didn't code share flights with *A/UA for USA-LHR/USA-FRA, and of course they've ended their code-share agreement in total anyway.

[pfunk]

TG will never make money until the reign in their counter staff from giving every Thai who know someone an upgrade

I believe Thai Airways reported a 6.229 BILLION Baht net income for the year ending 12/31/12, or are you referring just to certain routes? If the latter, I'd submit they would need to do a bit more than reign in comp/op-ups, as those folks probably wouldn't pony up the extra cost (revenue) for J or P anyway. So no chance for increased (/lost) revenue.

Thai Airways makes money because it has a much lower cost base than other airlines while still providing a good service. Thai Visa posters don't like this fact

It could make a lot more money with a sensible fleet planning strategy, less government interference and fewer comps. Though you're right that those comps would be unlikely to pay anyway and occupy empty seats in the premium cabins. Comp upgrades are given at check-in. I know someone who regularly gets one since he has a family member high up in TG management. He always books economy and usually gets upgraded but does occasionally have to slum it with us in economy.

As NanLaew has highlighted, the desire to maintain two dailies to a high profile capital like LHR - two dailies to FRA makes sense as someone pointed out *A connections intra-Europe - utilizes both slots and also reinforces that notion of schedule reliability which does go a ways towards maintaining brand loyalty. There may also be some significant corporate contracts in place which require certain schedules? And I'm not sure how easy it is, or if it is even allowed, to lease out a slot. A carrier servicing the North American markets might want to add another daily during their summer/peak season. Also, the airline industry is still highly regulated and there may be some issues re: exactly which carriers could even be eligible for leasing a slot. I was never sure why TG didn't code share flights with *A/UA for USA-LHR/USA-FRA, and of course they've ended their code-share agreement in total anyway.

Good points. Frequency is required for some corporate contracts since both flights are timed well for business travellers at each end since they provide the option of either early arrivals in each city or late departures from each city. Losing one flight would get rid of this flexibility. Before moving to BKK, I was travelling frequently to BKK from LHR and it was TG's schedule flexibility along with its frequent flyer programme that won my loyalty. The decent food in Economy compared to other carriers didn't hurt either. Judging by how packed the Business cabin usually was, I can't see that they were losing money on either flight pair.

If TG is losing money on either flight, they wouldn't have much trouble leasing out a slot pair. Theirs are at peak times and many Star Alliance partners would be happy to lease them. This happens a lot and is easy to do. Delta/Virgin, Qantas/BA and Lufthansa/BMI (before the purchase by LH and later sale to BA) are examples and the returns can be in the tens of millions per year.

Code shares have been dropped from some LHR -> North America routes because of high taxes on longhaul UK-originating flights. Most traffic now routes through Japan where UA and AC carry onwards from Narita with considerably lower taxes. I believe AC still codeshares from LHR to a number of eastern Canadian cities that don't have flights from Narita (Montreal, Ottawa, Halifax) so that a one-stop can still be offered. UA doesn't have the same need since flights are available from Narita to most of the same cities it flies to from LHR.

Edited May 10, 2013 by pfunk

[wooloomooloo]

I like both Thai and EVA and fly with whatever is cheapest on the day I book.

If I had to choose, I prefer Thai slightly more for service and food and obviously the wife prefers Thai. But nothing to grumble about with either.

We go at least twice a year to LOS and always bursting at the seams on both Thai and EVA. In fact, we usually avoid peak season on both trips and still invariably full.

[lomatopo]

Many airlines offer their employees, retirees, management and their families a whole host of travel benefits and perks. Some include NRSA – Non-Revenue Space Available – travel. While I am not familiar with TG’s policies – other than a vague memory that MPs get to fly business class – I am very familiar with a few carriers and their travel perks. NRSA travel, depending on the code, can and does include business and first class, along with comp/op-ups.

Edited May 10, 2013 by lomatopo