THAI to tap regional market

[webfact]

THAI to tap regional market
Sasithorn Ongdee,
Suchart Sritama
The Nation



New route network, new aircraft as airline unveils bold NEW strategy

BANGKOK: -- Thai Airways International (THAI) will focus on increasing flight frequencies on regional routes to tap higher travel demand and provide better services with a number of new aircraft to substitute for decommissioned ones.

As part of the 2014-18 rehabilitation plan approved by the board last week, the carrier would improve its fleet of aircraft, setting a target to have 103 in 2018 with an average age of 7.4 years, compared to its current 99 with an average age of 9.3 years, a company source said.

THAI would gradually decommission 32 old aircraft while adding 37 new ones - under the five-year aircraft-acquiring programme - to its fleet.

Out of the 37 aircraft, 28 have yet to be delivered. Thirteen will be acquired on a financial lease basis and 15 via operating leases. Fourteen aircraft will be delivered this year.

"It is possible that the company will shorten its aircraft-acquisition plan from 10 years to 5-8 year because of the financial situation. The long-term plan may not be flexible," another company source said.

As part of its aircraft-acquisition plan, the first Boeing 787-8 Dreamliners has been already delivered and is being used on the Bangkok-Chiang Mai route until September 10 as promotion prior to be flown on other routes to Perth or Haneda.

The airline is set to sell its Airbus A330s and Boeing 777-300s and 777-400s, the source said.

The airline's projection for 2018 is 47 million regional passengers, up 2.6 per cent, 11 million intercontinental people, up 6.4 per cent, and 25 million domestic people, up 4 per cent.

From 2014 to 2018, the carrier will increase flight frequencies on regional routes, especially on those routes that are profitable. In 2018, the carrier expected to provide 1,035 flights a week, up by 25 from its current figure.

The carrier will also acquire new aircraft in the long term to continuously substitute for decommissioned aircraft in response to higher travel demands.

THAI will strengthen its route network in major markets to keep its leader position as well as spreading its routes in surrounding areas by taking advantage of the Fifth Freedom of the Air. It would also adopt the multi-base airport concept and employ multi-brand strategy to tap into all market segments.

The source said, however, what the carrier would implement with its 2014-16 turnaround plan included increasing flight frequencies on profitable routes such Bangkok-Yangon and Bangkok-Sapporo and reducing or cancelling flights on some routes such as Bangkok to Sendai and Taipei.

As for new aircraft, the carrier would acquire the same model in order to reduce maintenance expense, said the source.

"THAI plans to use the new generation Boeing 787 to fly on the long range and highly profitable routes such as Bangkok-Perth and Bangkok-Narita," said the source, adding that it can help save up to 15 per cent in fuel costs.

Under the 2014-18 strategic fleet expansion plan, THAI has segmented its markets into four main groups.

First, those where THAI is the market leader such as Scandinavia, China and Japan where the carrier will focus on maintaining its leading position by increasing flight frequencies provided with modern in-flight equipment.

Second, those that are considered highly competitive markets such as Singapore, Hong Kong and Asean members. In this market segment, the carrier would join hands with its alliances to increase a number of flights connecting passengers at Subvarnabhumi Airport. It would also make use of its budget regional sister airline, Thai Smile, to protect its short-haul market share in the region.

Third, those where THAI's rivals are strong such as Russia and the United Arab Emirates where the carrier would monitor closely so it could flexibly change aircraft in a bid to be competitive.

Last, those that are considered to be potentially emerging markets such as India (Kochi and Amritsar), Eastern European (Vienna), and China (Hangzhou, Shenzhen, and Shantou) where the carrier would study the market for further market expansion.

Source: http://www.nationmultimedia.com/business/THAI-to-tap-regional-market-30241130.html

-- The Nation 2014-08-18

[NongKhaiKid]

Will all this increased activity, new aircraft etc mean they will increase fares even more to try and pay for it ?

They will end up with the only passengers being those on freebies anyway.

[shirtless]

It sounds like a plan but will it work,

[ezzra]

" As part of the 2014-18 rehabilitation plan approved by the board last week, the carrier would improve its fleet of aircraft, setting a target to have 103 in 2018 with an average age of 7.4 years, compared to its current 99 with an average age of 9.3 years, a company source said."

So before they will start to make money, they will spend more money buying/upgrading to new

aircrafts, obviously no one at Thai learned how to make money with what you have got first before

you go spend money you don't have, in an arena where the sky are filling up with low cost operators,

THAI dragging their feet and are a sleep at the wheel....

[Ricardo]

Trans :

We've got lots of new smaller aircraft entering the fleet, so we'll have to fly more-often to maintain capacity, but we'll still be growing less-quickly than the three market-segments, so we're actually planning on losing market-share, and this will be re-marketed as a success !

We'll try changing-aircraft on some routes, to match seasonal demand variations, and hope that this works this time around !

We'll hope that other Star-Alliance airlines might feed us some extra onward-business out of Bangkok, unless they already serve those markets themselves ?

Our 10-year aircraft aquisition-strategy has been torn-up, and will replaced with a 5-8 year one, because we're broke !

And we're going to sell those grounded A340s, which we've been unable to sell for years, somehow or other ! Any offers, squire ?

[Paulzed]

What they should look at doing, is pimping out all of the old planes and turning them into mile high planes, set them up inside with bars, casinos and the all so famous Thai bar girls and lady boys once they are flying in International air space they can open for business, they can have all types of themes to suit all of the different types of intrepid travellers and adventures.

[davehowden]

So over the next 4 years the plan is to increase the number of weekly flights by 2.42%, amazing, some plan.

And the revenue flows associated with this Master Plan??

[Ricardo]

"The airline is set to sell its Airbus A330s and Boeing 777-300s and 777-400s, the source said."

That must be a mis-print, they mean 747-400s, I believe ?

[Payboy]

THAI is the market leader in Scandinavia, China and Japan?

[Gutterboy]

Amazing Thailand.

It's a pretty simple formula - lower your prices while providing better service. Making pretty diagrams and buying new planes isn't going to change anything.

I know nothing about aviation but evidently I know more than these muppets.

[Boinhongkong]

I guess I will stop flying THAI after having been a GOLD member since they started their member cards over 20 years ago! No way I will enter a 787 dreamliner (I would rather call it my worst nightmare liner).

Hallo all other carriers flying to Scandinavia, France, Spain, Hong Kong and Japan! Any of you flying aircraft's where we passengers don't need to be guinea-pig's for unproven technology???

[Ricardo]

THAI is the market leader in Scandinavia, China and Japan?

In their own minds, perhaps ?

Or perhaps they meant to say, they're the leading Thai-owned airline, flying from those places to BKK (and ignoring HKT or DMK), and offering First-Class for poo-yais & government-officials on freebies, this month !

[Khun Paul]

Two things put me off Thai, Cost unusually high and poor service flown a couple of times internationally and both times ( once first class ) , service very poor.

They need to change their whole attitude before i would even consider returning. They are in fact pricing themselves out of the market.

[Boinhongkong]

Dear all of you who complain about THAI service level. I only said I would never fly THAI due to the fact that they're introducing an aircraft (Boeing 787) which is not safe on the routes I fly. I will always have THAI as one of my 4-5 preferred airlines due to their nice and effective in-flight staffs - if only the aircraft they use on the route I'm about to fly isn't a Boeing 787!

[ginjag]

Two things put me off Thai, Cost unusually high and poor service flown a couple of times internationally and both times ( once first class ) , service very poor.

They need to change their whole attitude before i would even consider returning. They are in fact pricing themselves out of the market.

The last sentence of yours, they have nearly accomplished that.

[CNXBKKMAN]

TG gets a bashing for high fares but flights out of the UK are priced cheap. The cheap fare for Heathrow Bangkok direct return is in the gbp500-600 range and an onward domestic flight can be added for 1 pound! This is a promotion that runs frequently. I don't know if they offer it on their website but travel agents sell these tickets all the time.

[ginjag]

TG gets a bashing for high fares but flights out of the UK are priced cheap. The cheap fare for Heathrow Bangkok direct return is in the gbp500-600 range and an onward domestic flight can be added for 1 pound! This is a promotion that runs frequently. I don't know if they offer it on their website but travel agents sell these tickets all the time.

Fine--if they can do it from the UK return why not from BKK-LHR return ?? Stupid pricing. no uniformity, Why 975 GBp from here ???

[Jim walker]

New route network, new aircraft as airline unveils bold NEW strategy missed the bit with new staff trained to look after paying customers.

[Artist]

Dear all of you who complain about THAI service level. I only said I would never fly THAI due to the fact that they're introducing an aircraft (Boeing 787) which is not safe on the routes I fly. I will always have THAI as one of my 4-5 preferred airlines due to their nice and effective in-flight staffs - if only the aircraft they use on the route I'm about to fly isn't a Boeing 787!

Why do you think the 787 is dangerous? Can you give me a link to your source. I am flying from PER to BKK on one on the 17th September (on that very profitable route) so I have a keen interest lol

[Ricardo]

TG gets a bashing for high fares but flights out of the UK are priced cheap. The cheap fare for Heathrow Bangkok direct return is in the gbp500-600 range and an onward domestic flight can be added for 1 pound! This is a promotion that runs frequently. I don't know if they offer it on their website but travel agents sell these tickets all the time.

Fine--if they can do it from the UK return why not from BKK-LHR return ?? Stupid pricing. no uniformity, Why 975 GBp from here ???

Agreed, when we lived in the UK, we were fairly loyal to Thai Airways, and their tickets were reasonably competitive.

If they were competitive going the other way, now that we're living out here, then we might consider switching back to them.

But so long as they charge roughly double the price of the cheapest competitor, with a lower hold-luggage allowance, I don't even bother to consider them.

"Up to you" , as I've learnt to say, living here.

[MAZ3]

I've been pricing LHR-BKK-LHR for Sept and THAI(TG)are around £767 and EVA £547(most dates),TG cheaper flights are normally only good for a month. I actually prefer TG,because the better service,food and Singha ;-) being served.

I flew TG in June for £544,including a domestic. Don't paying a little extra,but not over £200 for the same route/dates. I've heard that TG will not drop their pricing,because they have a superior product. That's why the flights are not full,shame. I've been using them for nearly 30 years.

[belg]

same price ? don't look at what the competition is offering ...

good luck !

[SoilSpoil]

Ground staff at Suvarnabhum is as rude as they get. No smile, poor service level, Guess they must hate their job, We gave Thai a last chance last week and they blew it, I rather take the bus than being treated as if I am lucky to be their overpaying customer,

[Boinhongkong]

Here are a few links about WHY THE 787 IS DANGEROUS:

http://www.ibtimes.com/boeing-787-complete-timeline-dreamliners-legacy-failure-after-cracks-discovered-wings-1560491

http://www.npr.org/2014/02/25/282431939/boeings-787-dreamliner-can-t-shake-major-malfunction-issues

http://en.wikipedia.org/wiki/Boeing_787_Dreamliner_battery_problems

http://gizmodo.com/boeings-787-dreamliner-is-having-wing-cracking-problem-1538980909

https://www.google.co.th/webhp?sourceid=chrome-instant&rlz=1C1CHKZ_enTH543TH544&ion=1&espv=2&ie=UTF-8#q=boeing+787+technical+problems&tbm=nws

The aircraft had probably not have been approved for flights in the US if it had been produced by a manufacture in Europe or Asia.

I will not set my foot in it (at least not until it has been in service for 10 years or so)

[loumaripol]

My wife and I just returned from a trip in economy to Shanghai. As a retired airline manager I tend to be a bit critical.

We booked late so the fares were high. The yield per passenger mile = $.40/mile. Ouch! Assuming that the revenue slope is fairly steep they most likely didn't earn more than an average of half that. Both flights were almost full.

Outbound The bag drop for internet checked passengers was painfully slow. The aircraft was a new 777-300ER with comfortable seats and leg room. Foot rests that were usable were a nice touch. The seats are 3-3-3. The inflight crew was excellent. Friendly and attentive. When a passenger had trouble stowing a carry on they helped with no fuss. Our veggitarian meals were good. State of the art entertainment system. I didn't use it so I can't say more.

The return trip check in is handled by an agent so no comment. The aircraft was an A330. Fairly old. The seats were uncomfortable. Lumbar suppport non-existant, and the seat cushion worn and uncomfortable. The crew was friendly, attentive and efficent. Our Veg meals were inedible.

Over the years my general impression has been that TG is a second tier carrier. I know from an A380 Captain that their crew utilization is poor. He flys 30-35 hours a month. When I was at Continental we averaged 56 hours/month. Southwest for a number of reasons has the best numbers - 90+ hours a month. I do not know what their aircraft utilization is but

less than 10 hours/day started to hit earnings. United was the loser in the US at 35.

The fleet is political in nature and not an efficent one. Both Airbus and Boeing, too many types of aircraft in the mix means high, recurring, training costs and higher maintenence expense. Employees are not encouraged to use initiative. Typical here I am afraid. Some of their recent financial moves were not clever. There is no market for the A340-500 and theyh still turned down $25mm offer from a private buyer in the middle east. If, as I suspect, they are no longer on the Thai Airways certificate they are probably never going to operate again.

[CNXBKKMAN]

I've been pricing LHR-BKK-LHR for Sept and THAI(TG)are around £767 and EVA £547(most dates),TG cheaper flights are normally only good for a month. I actually prefer TG,because the better service,food and Singha ;-) being served.

I flew TG in June for £544,including a domestic. Don't paying a little extra,but not over £200 for the same route/dates. I've heard that TG will not drop their pricing,because they have a superior product. That's why the flights are not full,shame. I've been using them for nearly 30 years.

GBP 544 is a great airfare and will have been cheaper than many indirect flights plus the domestic sector. Bargain! This same airfare will have been available on every date in September it's just when you came to book they have already been sold, there's no cheap seats left. For whatever reason the flights are busier and GBP 767 level is now the cheapest and will probably go higher if the flight books up. Book EVA this time, next time you might be back on Thai. I think the A380 is due on the Heathrow service later in the year.

[loumaripol]

Just a quick note on the 787 comments. I would fly the aircraft. I do have reservations about it. In particular the FAA decsion to authorize 787-9 routes 5.5 hours from the nearest suitable airport. I wouild not relish the prospect in any twin engine transport.

That means 5.5 hours grinding along at a lower altitude without the option of climbing to avoid weather at best. At worst wondering about the remaining engine. A friend of mine who is a Captain on the 767-400 shared my reaction. Normally extenson of ETOPs operations requires that each carrier apply after two years of operating with more restrictive 1.5 hours maximum from a suitable landing place. This applies to A330, B777, B767 and B757 flights overwater, as well as B737 and A320 narrow bodies.

However not a deal breaker on less remote routings. Modern aircraft design, and engine reliability is excellent.