Thai Airways' catering business comes down to earth

[webfact]

THAI AIRWAYS
Thai Airways' catering business comes down to earth
Achara Deboonme


Suraphon Israngura Na Ayuthya has a grand plan to grow THAI

BANGKOK: -- Offering food in the sky for decades, Thai Airways International's catering business is bringing these renowned first-class experiences to the ground - in restaurants.

The first is slated for opening in Bangkok's Soi Nana next year, as part of the business unit's plan to explore new revenue-generating opportunities, revealed Suraphon Israngura Na Ayuthya, managing director of THAI's catering department.

"The conventional business - to supply meals to airlines - faces stiff competition that results in low margins," he said. "Thailand's tourism industry is flourishing with a continued increase in the number of arrivals, but a legacy airline like THAI sees thinning profits. It's time to reach out and cash in on the burgeoning trend."

A new team is being formed for the restaurant, which will compete head to head with boutique outlets like Greyhound Cafe. Suraphon has high hopes that younger consumers' yearning for experiences beyond taste will ensure success.

He says it will be totally different from the three restaurants operated by THAI at provincial airports under an old business model, as sitting lounges for passengers and people who send them off. "Consumer behaviour has changed."

His unit is now catering 70,000 meals to 60 airlines on a daily basis, 80 per cent to THAI, generating 70 per cent of total revenue. Growth prospects are dim as potential clients do not include low-cost airlines. This year, it secured deals from two more airlines. Aside from an increase in raw-material costs - 20-30 per cent for some items - the margin is further squeezed by the minimum-wage increase.

Though the unit has relied on worker outsourcing for 10 years, which brings the number of outsourced workers to half of the 4,000 total, the new wage boosted human-resource costs to 28 per cent of the total. Meanwhile, raw-material costs have risen to 40 per cent. To grow this business, THAI now plans to provide catering service from Vientiane, Kathmandu and Myanmar.

But a bigger potential lies for the on-ground business, which now generates about Bt2 billion in annual revenue.

Expecting Bt6.8 billion revenue this year, the unit forecasts only Bt650 million in net profit - or below 10 per cent in profit margin compared with 20 per cent in the past.

"Airline catering will be maintained but we will expand on-ground business - bakery, restaurant and event catering," Suraphon said.

Its bakery business, Puff & Pie, is in the rebranding process to strengthen the catering unit's image. So far, five outlets have been opened in PTT fuel stations in Bangkok and peripheral provinces and the number will hit 150 in three years. While retail sales should generate some new revenue, the outlets will open wider opportunities to generate more from the catering business.

With Bt2 billion in annual revenue now, there's a high chance this figure will double, the executive said.

"With a proven track record for some time, we should be able to list on the Stock Exchange of Thailand - to become a new profit-making unit for THAI."


-- The Nation 2013-08-05

[Thai at Heart]

Where do they get their fruit juice from?

It makes a good effort at matching Listerine for flavour.

[Rooo]

The first is slated for opening in Bangkok's Soi Nana next year,

First class food in Soi Nana, yeah right !Do you get frequent flyer with that?

[NongKhaiKid]

Will it include contaminated rice and seafood from Koh Samet ?

[noitom]

Be sure to select the Thai spicy shrimp dish.

[Curt1591]

The Puff & Pie Restaurant, that has been located near Don Muang, behind the roadside Puff & Pie Bakery, put out some great food for years.

It possibly closed down when Swampy opened.

Because it is its own shipping company, they offered some great, fresh, imported entrees at reasonable pricing.

[laurentbkk]

Hope the food will be better than the one served on board. Their biz class food is equal to Singapore air economy class food. I never received from any other airlines my food in warm aluminum container but in nice china . TG was good .. it has became a nightmare.

[chooka]

Umm decisions shall we go out for airline food or hospital food?

Lets see do I have the fish and noodles or those little sausages and egg?

[geriatrickid]

Hope the food will be better than the one served on board. Their biz class food is equal to Singapore air economy class food. I never received from any other airlines my food in warm aluminum container but in nice china . TG was good .. it has became a nightmare.

TG's food has been getting slammed on the Frequent Flyer boards and quite rightly so. I don't even bother eating on the BKK-HKG flights now.

Downright horrible.

[JeremyBowskill]

Nice marketing strategy, look for hordes of drunk people who may want to eat crap. Maybe you can pre book a tray for outside Nana hotel, quick snack for between trannies.

[phosphorescent]

I don't think anyone has explained to them why people eat Thai Airways' food on Thai Airways' planes 45,000 feet in the sky?

[CPT]

I ate at a Thai airways restaurant in Phuket while waiting for a connection and was actually rather impressed. Best massaman curry I have had to date. I do see the Puff and Pie bakeries scattered around but have never tried one.

I have to admit, it is challenging to get excited about airline food...

[Pib]

Go to a restaurant to eat airline food...me thinks the restaurant will quickly go out of business.

[harrry]

THAI restaurant at Nana? Maybe it should be called the Mile High Club.

[ginjag]

Thai Airways should stop giving away PERKS to VIP Thai shareholders/friends of. All the free travel they hand out-save the money and put it into updating the fleet, even more than you are, catch up on the more economy planes, price your seats in line with what service you give.

try to give good flavoured wholesome food, rather than fancy looking food that is C##P.

I have booked a flight to UK with EVA-as opposed to Thai, 1. price was cheaper 2. better equipped aircraft 3, seat room more spacious 4 newer aircraft.

The flight is roughly the same time departure and arrival, both go into L.Heathrow.

I will miss my Thai royal perks,, but I don't care.

[Skywalker69]

Go to a restaurant to eat airline food...me thinks the restaurant will quickly go out of business.

More like a Crash landing.

[Chao Lao Beach]

So THAI's Thai food is going to be made in Vientiane, Kathmandu and Myanmar.

Though the unit has relied on worker outsourcing for 10 years, which brings the number of outsourced workers to half of the 4,000 total, the new wage boosted human-resource costs to 28 per cent of the total. Meanwhile, raw-material costs have risen to 40 per cent. To grow this business, THAI now plans to provide catering service from Vientiane, Kathmandu and Myanmar.

[DonaldBattles]

If the food is no better than the slop they serve on domestic flights they won't be able to give it away.

[nong38]

To help boost margins they will no doubt be off to Samet for the new lines in seafood currently at knock down prices! Might also be able to get a photo opportunity with the PM in her new Prada wellycogs, then again maybe not.

[bubba]

This is a joke, right? If the proposed restaurant food is anything like the greasy mess all cooked together in a casserole dish that they serve in business class, I am certain I will give their restaurant a miss. Honestly - the quality of Thai Airways' onboard food, as well of that in their lounges, is abysmal. Perhaps they should spend a bit more time serving edible food on their flights than expanding into ground based restaurant businesses. Due to lack of options, I do a lot of regional flights on TG and have recently begun taking my own food for the flight, and that is in business class! So instead of working on delivering a quality product in their core business area, why are TG expanding into the already competitive restaurant business?

Interestingly, while the onboard food is sh*#te in business class, the wine list is quite nice, with three decent reds and three decent whites on every flight.

Edited August 5, 2013 by bubba

[deecee10]

Not much onboard competition at 30,000 feet. Can't exactly pop out for a Big Mac or a freshly baked baguette..

[lorbhaim]

Where do they get their fruit juice from?

It makes a good effort at matching Listerine for flavour.

LOL!!!!!!!

I myself - dont fly Thaiairways.

Any other is fine.

Haim

[hellodolly]

Thai Airways should stop giving away PERKS to VIP Thai shareholders/friends of. All the free travel they hand out-save the money and put it into updating the fleet, even more than you are, catch up on the more economy planes, price your seats in line with what service you give.

try to give good flavoured wholesome food, rather than fancy looking food that is C##P.

I have booked a flight to UK with EVA-as opposed to Thai, 1. price was cheaper 2. better equipped aircraft 3, seat room more spacious 4 newer aircraft.

The flight is roughly the same time departure and arrival, both go into L.Heathrow.

I will miss my Thai royal perks,, but I don't care.

I have flown first class from Bangkok to Chiang Mai on my way home as Eva air does not come into Chiang Mai. The Thai air first class was on a par with the deluxe economy on EVA Air.

[Thai at Heart]

Where do they get their fruit juice from?

It makes a good effort at matching Listerine for flavour.

LOL!!!!!!!

I myself - dont fly Thaiairways.

Any other is fine.

Haim

No really, the orange juice they have on domestic and some of the international flights, is absolutely unique. It hasn't changed for the 17 or so years that I have been flying. It is an experience in itself.

The little plactic pot, with the foil top. Impossible to pour, so the best way is to pull the top back a little and poke a hole with your plastic fork, take it in two gulps, of what appears to be syrupy, undiluted, flourescent orange coloured, cordial. Zingy, tart, so sweet your teeth want to scream. I was bemused by it the first time I came to Thailand, and still am to this day.

[mrtoad]

Will make sure to avoid that place, can't think of anything worse than actually paying for airline food

[Bagwan]

Offering food in the sky for decades, Thai Airways International's catering business is bringing these renowned first-class experiences to the ground - in restaurants.

Renowned first class experience my arse. Second only to British Rail in it's their awfulness.

[ridkun]

Will they bring their flight attendances down to earth as well? I always feel like I have to speak to them like i owe them something.

[bubba]

Not much onboard competition at 30,000 feet. Can't exactly pop out for a Big Mac or a freshly baked baguette..

No, but with a bit of foresight, one could purchase a Big Mac and fries before boarding, then after takeoff, still have a more enjoyable meal than the oily mess that is considered to be a "meal" in Thai Airways business class.

[blazes]

Hope the food will be better than the one served on board. Their biz class food is equal to Singapore air economy class food. I never received from any other airlines my food in warm aluminum container but in nice china . TG was good .. it has became a nightmare.

And with Goldman Sachs hoarding aluminum in NY warehouses to force up the price of this metal, you can expect to pay a little bit more for your Biz Class comfort food....

[blazes]

Thai Airways should stop giving away PERKS to VIP Thai shareholders/friends of. All the free travel they hand out-save the money and put it into updating the fleet, even more than you are, catch up on the more economy planes, price your seats in line with what service you give.

try to give good flavoured wholesome food, rather than fancy looking food that is C##P.

I have booked a flight to UK with EVA-as opposed to Thai, 1. price was cheaper 2. better equipped aircraft 3, seat room more spacious 4 newer aircraft.

The flight is roughly the same time departure and arrival, both go into L.Heathrow.

I will miss my Thai royal perks,, but I don't care.

I have flown first class from Bangkok to Chiang Mai on my way home as Eva air does not come into Chiang Mai. The Thai air first class was on a par with the deluxe economy on EVA Air.

This is comparing apples and oranges. I have flown (same day) Eva Biz Class followed by BKK-CNX, (TG) also Biz Class.

But really, what on earth do you expect in the way of food, no matter what class you are in, on a one-hour flight?? Crazy.

It's amazing that they serve ANYthing on so short a flight. Are you perpetually hungry or something???