THAI plans big push in 2nd half

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NATIONAL CARRIER
THAI plans big push in 2nd half
BAMRUNG AMNATCHAROENRIT
THE NATION

BANGKOK: -- Thai Airways International Plc will next week start executing an aggressive second-half business plan to achieve its full-year targets for sales growth of 11 per cent and net profit of Bt6 billion amid increasingly fierce competition, particularly from the entry of low-cost carriers here.

The national carrier has projected 2013 sales at Bt224 billion, but its performance in the second quarter was worse than expected, compared to the same quarter last year. It was hit by the strengthening of the baht and the weakening of the Japanese yen and euro. Especially the yen, which plunged 17-20 per cent, Chokchai Panyayong, executive vice president for commercial operations, said yesterday.

However, first-half results were still positive and the airline was confident it would achieve its business metrics by the end of this year, despite the projection for the overall industry to expand by only 3-3.5 per cent.

A special commercial executive committee, chaired by THAI president Sorajak Kasemsuvan, has been set up to help monitor the fast-changing industry and gather information to strengthen its strategy. It will also touch bases with THAI offices worldwide every week via Skype to make it even easier to make decisions on urgent matters.

Chokchai, who moved to this post on June 24 from the strategy and business development division, will spearhead the team to boost sales by 10-15 per cent this half year to ensure the airline meets its sales goals for the entire year.

THAI's board hopes he leverages his long years of experience to strengthen the airline's business at a time when the world's economy from Europe to Asia is in a state of flux. Especially foreign currency fluctuation poses a major risk in the rest of the year. The carrier will take delivery of 17 new aircraft and they must be put to best use.

It does business in 50 currencies, but mainly the baht (30 per cent), yen (20 per cent), euro (30 per cent) and US dollar (10 per cent).

The focus would be more on fast-growing regional markets offering higher margins, particularly China and Japan. The two countries are still growing and demand there for air travel will be on the rise. Russia is also on the radar screen.

The semi-annual plan calls for an increase in flight frequency and seat capacity as well as new routes to the two markets. Japan is expected to enjoy a travel boom after it recently waived visas for up to 15 days for Thai tourists. This will force THAI to compete head-on with low-cost carriers, especially long-haul AirAsia X, which plans to serve Japan from Bangkok.

Even though Europe is in dire financial straits and its economic prospects are blurry, the market is still important and the airline will continue focusing on it to maintain its passenger base.

Europe and Asia contribute 45 per cent of sales each, while 10 per cent comes from the domestic market. In the future, Asia is expected to increase to 50 per cent.

THAI has 91 aircraft in its fleet, with 58 more arriving in 2017.


-- The Nation 2013-07-04

[Ricardo]

Expect more Thai-Smile-branded A320s to replace 'real' Thai-Airways flights, on all domestic routes, but with prices virtually-unchanged.

And expect excuses for missing this year's targets, from the new PTP-approved management, at the year-end.

I somehow doubt their ability to compete on-price with Russian charter-airlines/LCCs flying elderly planes into Phuket & U-tapao.

If only customers were willing to pay even-more for seats on Thai flights, why don't they understand, once shouldn't compare their value-for-money with their competitors, its not fair !

[sjjmmi]

Half price is it

[Chao Lao Beach]

Thai has this wonderful thing. The large majority of Thais I know who travel Intl only travel on THAI, regardless of the price.

[sjjmmi]

Thai has this wonderful thing. The large majority of Thais I know who travel Intl only travel on THAI, regardless of the price.

Reason is they can only speak Thai

[baboon]

Just put the fares up. Job done.

[MrSlatersParrot]

The new tv ads for Thai promote them solely as a luxury brand.

By contrast I like the new "amazing Thailand" ad with the young Brit.

It's not pretentious.

It promotes Thailand as a fun destination.

It's innocent and features enough imagery for summer starved Brits etc to want to come, I think.

[KOZMO]

Thai Airlines is shooting themselves in the foot. When they had the only non-stop flight from L.A> BKK allot of people would pay the extra $3-400 for the flight. It was 7 days a week. Now going thru Inchon, Korea they still charge more than the other airlines and lo and behold their sales have dropped so drastically, that now they only have 4 flights a week. They try and keep saying high and low season while the other airlines could care less. Big mistatke!!

[steveyinasia]

Just answering an email to the Royal Orchid membership would be a start

[AjarnMartin]

Just answering an email to the Royal Orchid membership would be a start

Just answering an email to the Royal Orchid membership would be a start

Good point Steve. I have been a member of this this airlines frequent flier programme for many years and their customer service is so appalling that I rarely use the airline. They don't react to genuine concerns and there is a plethora of misinformation. On top of that, the aircraft are old and shabby, the Business Class lounges are poorly serviced and the flight attendants are surly. I'm booked on a Business Class return flight BKK-SYD in October and will weigh up their current status before disregarding them as a preferred carrier for good.

[konfuzed]

flying cheaper on BA than Thai (with wife and 2 kids and when I had sufficient miles for a "free ticket" on Thai) is a joke...

If Thai want to take ground back, get better inflight entertainment in economy, nicer crew and put your prices in line with how the market perceives the airline (not how Thai imagines itself).

[Thai at Heart]

The new tv ads for Thai promote them solely as a luxury brand.

By contrast I like the new "amazing Thailand" ad with the young Brit.

It's not pretentious.

It promotes Thailand as a fun destination.

It's innocent and features enough imagery for summer starved Brits etc to want to come, I think.

The new Thai adverts are very underwhelming.

"Experience the Thainess". Which to 99% of people means absolutely nothing whatsoever.

Then, if it does mean anything, I can just see husbands sitting in Europe in front of the TV, trying to quantify Thainess in their minds, and the wives scowling.

Edited July 4, 2013 by Thai at Heart

[Danbit]

For Europe EVA is a good choise, they have Premium Economi to Amsterdan to a fine price and now as a Star Member so you get your miles. Low miles for a upgrade with a EVA frequent flyer card.

Egypt Air is what I use to Copenhagen, 2 times a week do they have their own connection to Copenhagen and their Business Class is priced just as Thai Economy, The lounge in Cairo is just terrible, staff and food in the air is fine but you can´t get any alcohol, good for the liver. 3-4 Hours wait in Cairo. Price from CPH 25% cheaper than price from BKK, do not ask why probaby decided by Muhammed.

Try business with Emirates you are able to enter their lounge in Dubai, but sorry it is allways 120% full as all with a UAE gold card have acces.

[grantbkk]

Tried to book a r/t to Los Angeles business class in Feb 2012 for May. No have. Crazy right? Tried the same in Jan 2013 $750 more than a Korean Air A380. Might have considered the direct flight but that's gone. Thainess...

[bangon04]

This sounds like a THAI Airways press release, not a newspaper story.

Written by BAMRUNG AMNATCHAROENRIT. Is the clue in the family name?

[ginjag]

Another 50 odd planes by 2017 ?? They have given these numbers before and delayed the delivery, look back over the years on visa with these Thai ordes, surprising, NO. Get a decent European to run the airline, and you may see some improvement. Too many government officials involved here to do much good--they seem to cater for themselves/friends and Hi so's, free B's---- rather than the long suffering customers---- Of course there will be satisfied customers among posters so please do not think I am just wanting to bash Thai.

[Shaksey]

Another 50 odd planes by 2017 ?? They have given these numbers before and delayed the delivery, look back over the years on visa with these Thai ordes, surprising, NO. Get a decent European to run the airline, and you may see some improvement. Too many government officials involved here to do much good--they seem to cater for themselves/friends and Hi so's, free B's---- rather than the long suffering customers---- Of course there will be satisfied customers among posters so please do not think I am just wanting to bash Thai.

Indeed, and if you're unlucky enough to be in Biz or First on one of their flights when some TG officials, friends, Hi-So's, politicians etc turn up last minute then you can expect to be moved to Eco with no discussion so they can accommodate these fine people in the class they deserve.

Edited July 4, 2013 by Shaksey

[Chao Lao Beach]

Thai has this wonderful thing. The large majority of Thais I know who travel Intl only travel on THAI, regardless of the price.

Reason is they can only speak Thai

I disagree, the Thais that I know who travel abroad can communicate in English no problem. They have just been brainwashed into ONLY THAI, even when it is 24,000 baht more for a seat, yes MORE than other flag carries like SQ and CX.

[lomatopo]

I'm sure there is a lot of publicly available detail re: TG's aircraft orders, I was able to find this, but it may be outdated

Thai Airways makes large aircraft order

Thai Airways has announced ambitious aircraft acquisition plans. In an initial phase (between 2011 and 2017), it will receive 11 new narrow-bodied aircraft and 26 wide-bodied aircraft for intercontinental and regional routes at a cost of approximately Bt216.1 billion. In a second phase (between 2018 and 2022), 38 wide-bodied aircraft, costing approximately Bt241.1 billion, should come into operation (21 are on firm order, with options on a further 17).

The acquisition are designed to improve efficiency and increase fleet size for traffic growth. This investment is in addition to previously approved orders of 26 aircraft awaiting imminent delivery: 12 A330-300s, six A380-800s, and eight Boeing 777-300ERs. The airline says the new aircraft will be equipped and fitted with the latest specification seating along with modern IFE systems.

Thai has set a tentative date of September 2012 for the operation of its A380-800 (seating more than 500) on its Bangkok-London service. Headline features of the A380 include bigger individual TV screens in economy class.

So some combination of thirty-seven and twenty-six equaling fifty or more are due to be delivered/put into operation by 2017. Obviously some of these will replace older aircraft which get retired/sold.

The currency issues are a huge challenge for TG as so much of their revenue and stated income comes from outside Thailand. I think they can manage a lot of their off-shore costs, e.g. pay for fuel in LHR with locally generated revenue in GBP, but it's still a challenge.

The long thin routes (direct, non-stop) to JFK and LAX were a mistake, even SQ has gotten out of the business.

For the most part I think TG are a reasonably well-run airline and are generally profitable.

Edited July 5, 2013 by lomatopo