THAI hopes its sister airline will pull it out of losses

[webfact]

THAI hopes its sister airline will pull it out of losses
Bamrung Amnatcharoenrit
The Nation

BANGKOK: -- Thai Airways International (THAI) is pinning its hopes on THAI Smile - its sister airline that offers light premium service - in a move to boost its performance at a time when it is suffering from fierce competition and big losses.

The sister airline has been spun off as an independent company under the name Thai Smile Airways Co. From February, it will go into high gear to capture a big share of both the domestic and regional markets.

It will receive an air operator's certificate (AOC) in the next two months and its code will most probably be "SM". Woranate Laprabang is overseeing the operation as acting managing director.

The national carrier is hoping that THAI Smile will help ease its swelling costs and bad business performance. THAI and its subsidiaries reported a net loss of Bt6.313 billion in the first nine months of this year.

Chokchai Panyayong, THAI's senior executive vice president, said THAI Smile was in the process of separating from THAI, which holds a 100-per-cent stake. The carrier is run as a cost-centric scheme so as to make it more competitive.

Its management structure will be more flexible, especially when it comes to hiring staff. Operations that are not a part of its direct focus will be outsourced. However, in legal terms, the company will remain a state enterprise and its chief will be selected according to company law, which sets the selection procedure to be completed within a year.

At present, the parent company is defining a group strategy for THAI Smile to follow. THAI will not set aggressive growth strategies, but will focus more on maintaining stability. However, it does expect to grow fast with THAI Smile, as its key target will be the mass market.

The main focus will be the domestic market and the airline has earmarked its Airbus A320-200 aircraft for short-haul flights. However, it might pick its wide-bodied aircraft like Boeing 777 for medium-range flights to countries like Japan and South Korea that take about five or six hours. This will be the second step of its business plan.

Chokchai said the Japan and South Korea route had room for growth, especially driven by travellers looking for prices between low-cost and full-service carriers. This group wants more onboard service and other options at a reasonable price.

THAI Smile's current domestic schedule covers Chiang Mai, Surat Thani, Phuket, Krabi, Udon Thani, Ubon Ratchathani and Hat Yai from Suvarnabhumi Airport. It also flies the Chiang Mai-Phuket route. Its overseas destinations from Bangkok's Suvarnabhumi include Macau, Ahmedabad, Colombo, Chongqing and Changsha.

From December 15, it will add four flights a week to Luang Prabang, making it its fifth overseas destination.

Woranate said 40 per cent of its passengers to Luang Prabang would come from THAI, especially the transit passengers from Europe. At present, there are only two airlines that fly to Luang Prabang - Bangkok Airways and Lao Airlines.

As for regional expansion, the firm will reconsider its plans to open new routes in India, due to the depreciation of the rupee.

THAI Smile, so far, has nine aircraft in its fleet with a 10th to be added next month. The number of aircraft is set to rise to 17 next year.


-- The Nation 2013-12-02

[noitom]

They're in high gear. These Thais know how to bring it.

[AyG]

I see from their website that their idea of "business class" is a bit of a joke: they leave the middle seat of three economy seats empty and give you a hot meal.

[JoeThePoster]

A turd by any other name would still smell like sh!t, I guess.

[rnw]

THAI SMILE FARES 'RE TOO HIGH, MUCH HIGHER THAN SRI LANKAN AIRLINES, PHILIPPINES AIRLINES... WHILE SERVICES 'RE VERY BASIC,AT LEAST NO WIFI,NO INTERNET IN CABIN, NO EXTRA LUGGAGE...THAI SMILE COLOMBO AND CHONGQING SERVICES 'RE RATHER POOR, NOT AS FINE AS AIRASIA...

THAI SMILE ONLINE BOOKING SYSTEM'S TOO CORNY AND SLOW,BASICALLY USING SAME ONLINE SYSTEM AS THAI AIRWAYS.

[steve down under]

THAI SMILE FARES 'RE TOO HIGH, MUCH HIGHER THAN SRI LANKAN AIRLINES, PHILIPPINES AIRLINES... WHILE SERVICES 'RE VERY BASIC,AT LEAST NO WIFI,NO INTERNET IN CABIN, NO EXTRA LUGGAGE...THAI SMILE COLOMBO AND CHONGQING SERVICES 'RE RATHER POOR, NOT AS FINE AS AIRASIA...

THAI SMILE ONLINE BOOKING SYSTEM'S TOO CORNY AND SLOW,BASICALLY USING SAME ONLINE SYSTEM AS THAI AIRWAYS.

Please dont shout we arent deaf !

[ginjag]

THAI SMILE FARES 'RE TOO HIGH, MUCH HIGHER THAN SRI LANKAN AIRLINES, PHILIPPINES AIRLINES... WHILE SERVICES 'RE VERY BASIC,AT LEAST NO WIFI,NO INTERNET IN CABIN, NO EXTRA LUGGAGE...THAI SMILE COLOMBO AND CHONGQING SERVICES 'RE RATHER POOR, NOT AS FINE AS AIRASIA...

THAI SMILE ONLINE BOOKING SYSTEM'S TOO CORNY AND SLOW,BASICALLY USING SAME ONLINE SYSTEM AS THAI AIRWAYS.

Please dont shout we arent deaf !

Now here is another reply, so that makes 3 shouts.

But the shouting poster is correct. I used Thai Smile , Udon-BKK, 2,800 bht one way --there were 3 persons on a return. 16,800 bht--just outrageous, couldn't get on A Asia, who would have charged 11,000 maximum but normally on promotion about 8,000.

same planes, same room, BUT you did get a stupid cake and orange drink with SMILE,,, makes high profit from the snacks.

[AyG]

Not even an inflight entertainment system. Their website tells you to take a book to read because they don't provide any reading materials.

[JRSoul]

Its code will most probably be "SM"

I suppose there are a number of reasons not to use TS.

[bigbamboo]

So Big Brother airline is relying on it's Little Sister airline to get it out of the ****.

This story sounds very familiar. Could it be some sort of Thai allegory?

[asiaexpat]

The same problem cripples Thai Smile that has plagued Thai International for years, incompetent government appointed senior executives. Until professional airline executives are hired to run Thai, they will languish and continue to drain the the government coffers.

[Ulic]

As they say, if you want to make a small fortune in the airline industry.......................start with a large one.

[englishoak]

Both smile and Thai airways ive found to be over priced and substandard compared to other operators. I won't fly either if at all possible and suspect if Thai dose not get its act in order and respond to ever competitive and superior services it will go the way of the dinosaur. If that happens it will not be missed by this frequent flyer.

[h90]

The same problem cripples Thai Smile that has plagued Thai International for years, incompetent government appointed senior executives. Until professional airline executives are hired to run Thai, they will languish and continue to drain the the government coffers.

AND: a lot corruption, contract on companies set up from politicians. And everyone tries to create a job for the friends neighbors Mia Noi. So they have way too many staff. Even low pay staff costs a lot if you have many of them. And all former Executives and family members fly for free in business class, often there is almost nothing left to sale.

In my opinion there is only one chance, let it go bankrupt and fund a new airline "Thailand Airlines", "Thai Airfly" whatever.....And take over only the necessary staff and get rid of all the privileges.

Just that won't happen.

[spidermike007]

THAI SMILE FARES 'RE TOO HIGH, MUCH HIGHER THAN SRI LANKAN AIRLINES, PHILIPPINES AIRLINES... WHILE SERVICES 'RE VERY BASIC,AT LEAST NO WIFI,NO INTERNET IN CABIN, NO EXTRA LUGGAGE...THAI SMILE COLOMBO AND CHONGQING SERVICES 'RE RATHER POOR, NOT AS FINE AS AIRASIA...

THAI SMILE ONLINE BOOKING SYSTEM'S TOO CORNY AND SLOW,BASICALLY USING SAME ONLINE SYSTEM AS THAI AIRWAYS.

I think it can be said that this company simply does not know how to run an airline. Period. All they have to do is three things.

1. improve the service

2. upgrade the cabins

3. lower prices to the point where they are competitive with other airlines.

That is the entire business plan needed to bring the airline back to competitiveness. Every time I have checked the airline for a fare, I have ended up booking with either EVA Air, Bangkok Air, Air Asia, Nok, or another airline. But, it has been years since I have flown with them. And the last time I did fly with them, it took 45 minutes to get our bags after we arrived. They are poorly run. Many of their jets are tired. Service can be surly at times. The food is not above average for an airline. And the prices are wildly out of sync with the real world. How do you develop a successful airline with that formula? The airline long ago fell out of the top ten. Doesn't management acknowledge that? Don't they understand there are reasons for that?

And their chance for salvation appears to be going nowhere, as MW, and other posters say Thai Smile is overpriced. Will they ever get it? What is so magical about this airline that they feel they can get away with a lack of competitive pricing? Some of us would refer to this as hubris. Others would call it silly pride.

[realenglish1]

In a nutshell Thai Airways charges far too much for the routes they fly. If I can get a fair at 20 to 30% less with another carrier then I will do this.Its a no brainier so I wonder what their problem is

They know the problem but refuse to change. Too much money

[BlueSkyCowboy]

In a nutshell Thai Airways charges far too much for the routes they fly. If I can get a fair at 20 to 30% less with another carrier then I will do this.Its a no brainier so I wonder what their problem is

They know the problem but refuse to change. Too much money

Cathay Pacific to the US is a lot cheaper, new aircraft and good service

[Cats4ever]

I flew Thai from Melbourne recently. Price was O.K., inflight service for cattle class was good but the seats. My sore ars?. I flew Thai Smile business BKK to Udon a few months ago. Seats 3 abreast and no gaps left. The seats, see above.

[zakk9]

They should have named it Thai Smai. That's how it's pronounced anyway

[Alwyn]

As they say, if you want to make a small fortune in the airline industry.......................start with a large one

Exactly the same advice I got on how to make a small fortune in Thailand!

[bangon04]

I see from their website that their idea of "business class" is a bit of a joke: they leave the middle seat of three economy seats empty and give you a hot meal.

Which is exactly what companies like Lufthansa do on shorthaul.. are you calling Lufthansa a joke airline too?

[bangon04]

I see from their website that their idea of "business class" is a bit of a joke: they leave the middle seat of three economy seats empty and give you a hot meal.

Which is exactly what companies like Lufthansa do on shorthaul.. are you calling Lufthansa a joke airline too?

[AyG]

I see from their website that their idea of "business class" is a bit of a joke: they leave the middle seat of three economy seats empty and give you a hot meal.

Which is exactly what companies like Lufthansa do on shorthaul.. are you calling Lufthansa a joke airline too?

Except Thai Smile is also doing this for long haul.

[wileycoyote]

Hope so !

[moe666]

I think we have a case of wishful thinking.

[SantiSuk]

But I thought that Thai Smile was largely a carve out of previous Thai Airways routes, transferred into this new group brand. Thai group was up $hit creek for years, dunno how they expect a carve out to 'rescue' them. Thailand is obviously one of the few places where you can polish a turd!

[Thai at Heart]

I read that quickly as "sinister airline".

[shaurene]

They run Thai the same way all businesses are run in Thailand, if they need more money just increase the items they sell instead of looking at waste, excessive wages and bonus. I just paid 2,500 for one way to BKK from Khon Kaen Air Asia just started the run and 1400 to the old airport.

They need to look overseas like other world companies for top management to run a large company like Thai.

[Ricardo]

But I thought that Thai Smile was largely a carve out of previous Thai Airways routes, transferred into this new group brand. Thai group was up $hit creek for years, dunno how they expect a carve out to 'rescue' them. Thailand is obviously one of the few places where you can polish a turd!

But at least Thai-Smile are finally using the same smaller & more-efficient aircraft as their competitors on these routes. Elderly wide-bodied jets couldn't offer the same frequency on routes like these, as modern narrow-bodied planes can, 'If you can't Beat them, then Join them !".

However whether it was necessary to start a new 'sister airline', with the attendant marketing/admin-costs, rather than operating them under the parent-brand, is debatable. Perhaps it enabled Thai to cut the pay of the flight/cabin-crew, from the levels enjoyed within the legacy-airline ?

While Thai's Board looks eagerly to Thai-Smile, to pull the group out of the mire, one hopes that they're also still addressing their wider problems, and not just using this as an excuse to delay necessary-actions ? But with a largely government-owned company, run by political-appointees, that's far from certain, IMO.

[GentlemanJim]

What chance can there be to cut losses with the present system of 'privilege'. The Thai Airways spy's are already out and it seems that Yingluck's big sister has 12 seats to London booked on the TG910 tomorrow evening. Now as she is an MP and all the seats are booked in her name it will be an automatic upgrade to first and business. That's not a lot of lost revenue is it! (of course of great interest is why does Yinglucks big sister have 12 seats to London booked???)