THAI to reduce international and regional flights to cut costs

[webfact]

THAI to reduce international and regional flights to cut costs



BANGKOK: -- Thai Airways International has agreed to reduce several international and regional flights to save costs and, at the same time, increase flights to Europe which have more potential to make profits.

THAI president Mr Jarumporn Chotikasathien disclosed over the weekend that the flights on four routes namely Bangkok-Seoul-Los Angeles, Bangkok-Rome, Bangkok-Calcutta and Bangkok-Hyder Rabat would be reduced effectively as of October 25.

Also, Bangkok-Luang Prabang and Bangkok-Chang Xa services will be suspended and the operations of these two routes will be taken over by Thai Smile low-cost airline.

Mr Jarumporn said that THAI sustained about 300 million baht a year from operating each of the aforementioned routes because of the unattractive air fares and improper types of aircraft used. The services cutback, he added, will reduce passenger load by an average of 6 percent.

Staff who are to be affected by the suspension of services will face layoffs or transferred to the head office or they can join the early-retirement programme, said Mr Jarumporn. He added that THAI might resume operating the suspended routes if its financial condition has improved in the next two years.

Overall, Mr Jarumporn said he expected improved performance for the second half of the year with over 100 percent growth in the Chinese market and steady improvement of the passenger’s growth on the European routes.

Source: http://englishnews.thaipbs.or.th/thai-to-reduce-international-and-regional-flights-to-cut-costs


-- Thai PBS 2015-07-27

[Jonathan Fairfield]

Thai Airways to cut 1,401 jobs, suspend flights to U.S.

BANGKOK (Reuters) - Thai Airways International Pcl <THAI.BK> plans to cut 1,401 jobs through voluntary retirement this year and suspend its loss-making flights to Los Angeles and Rome as it pushes ahead with a restructuring plan, its president said on Sunday.

Thailand's national carrier aims to reduce operating costs and capacity by 20 percent under the two-year plan, which also calls for aircraft sales and a reduction in staffing.

The firm is one of several state-controlled companies that the military government has targeted for reform since seizing power in May 2014.

The flight suspension will reduce Thai Air capacity by 5 percent, President Charumporn Jotikasthira told Reuters in a telephone interview. The company aims to cut capacity by 15 percent during the second of 2015.

Read more: http://www.reuters.com/article/2015/07/26/us-thai-airways-restucturing-idUSKCN0Q00CI20150726

-- Reuters 2015-07-27

[bangkokheat]

i just dont understand, dont they know the growth rate of tourism here, tat should run this airline

[monty1412]

i just dont understand, dont they know the growth rate of tourism here, tat should run this airline

And therein lies the problem.... even in the article above the first key warning that in reality its going to be more of the same is the statement about the growth in the Chinese market.... these routes are loss makers, the fares dont allow for any reasonable profit....... focus on the Chinese market and you will very quickly see the bottom line become a bolder red.

However it is encouraging that they are looking more at the higher profit better quality tourist European market and one hopes that their strategic plan is focussed on this market and use Chinese market as capacity fill only ( contribution business only).... however I fear that the powers that be at Thai Airlines will not want to see drastically reduced PAX numbers compared to other regional airlines......

[halloween]

Think how much they could save if they shut it down completely.

[englishoak]

Bailing before they get banned, this is how they are going to get enough qualified staff, reduce the size ergo the need for so many they havnt got.

[Sydebolle]

Get that arrogant smile off the staff's face; introduce a tariff structure which is competitive and revamp the entire image.
Ever been to TG's Pattaya office without parking and waiting a solid 45 minutes to be served by a frustrated ticket agent?
One in ten flights is rescheduled, cancelled or the passenger (i.e. me) rerouted. The other local carriers are no better but operate at half the price.

Long haul: use Middle Eastern or even European carriers. Finnair, Air France or KLM - just to name three - take you to Europe in more modern planes with a proven safety record (no DCA waving alarming flags on security or safety) at upto half the price; presently around THB 25'000. All no frills but serving the purpose of taking you from A to B.

If they can do it I wonder why TG cannot do it. 25 years ago TG was the pride of Thailand - a very, very, very far cry from what it represents today.

[Minnehaha]

i just dont understand, dont they know the growth rate of tourism here, tat should run this airline

heh heh.

its probably a real move to stop or slow the bleeding.

but it is terribly managed. I stopped flying them years ago, along with many others.

and it is a very competitive marketplace. it is not easy to operate an airline. it requires huge investment in assets and maintenance. these issues alone demand competent management. dealing with the competition is another.

they have to exist - Thailand needs a national carrier for many reasons. there are many locations that need service, and so many state employees, officers, retired employees, families, and so on that need tickets, etc. and everyone wants a free ticket.

so, it will go on making a loss with the money coming from the national coffers, until forever.......

[zaphod reborn]

THAI's BKK-LAX route was a loser from the get-go. They charged twice as much for the flight than any other carrier, with the only selling point being that it was a non-stop flight. It should have been scrapped years ago.

[KOZMO]

Bailing before they get banned, this is how they are going to get enough qualified staff, reduce the size ergo the need for so many they havnt got.

The FAA will be the first International agency to shut them down, since they cannot maintain the aircraft properly. so they decided to stop all traffic to america to "SAVE FACE"

[Thian]

In Europe i see loads of advertisings: 800 euro to bali, hotel plus flight for 10 days. To Thailand only the ticket Thai air costs more then that.

Also Malaysia is still in promotion.

[kjhbigv]

I see they have put the old night flight back on for LHR-BKK, so now they have a Boeing 777 and an A380 leaving London every day.

Also, prices for LHR-BKK-LHR a with Thai at the moment are fantastic.....GBP509.00 LHR-CNX-LHR all in!

GBP498.00 with online agents.

Cheapest by a long way!

[stoneyboy]

I see they have put the old night flight back on for LHR-BKK, so now they have a Boeing 777 and an A380 leaving London every day.

Also, prices for LHR-BKK-LHR a with Thai at the moment are fantastic.....GBP509.00 LHR-CNX-LHR all in!

GBP498.00 with online agents.

Cheapest by a long way!

Which wasn't the case only a month ago.

[CWMcMurray]

THAI's BKK-LAX route was a loser from the get-go. They charged twice as much for the flight than any other carrier, with the only selling point being that it was a non-stop flight. It should have been scrapped years ago.

But it's no longer nonstop... As the aircraft goes to Seoul for stop over

[bamnutsak]

I see they have put the old night flight back on for LHR-BKK, so now they have a Boeing 777 and an A380 leaving London every day.

Also, prices for LHR-BKK-LHR a with Thai at the moment are fantastic.....GBP509.00 LHR-CNX-LHR all in!

GBP498.00 with online agents.

Cheapest by a long way!

TG "owns" two slots at LHR, they have to use them (or lease them to another carrier) or lose them.

Slots at LHR are limited and relatively valuable, although VN did a get a newly created slot recently.

They ceased the second flight on 1 July 2015, will begin again on 25 Oct 2015.

LHR-BKK-LHR will always be less expensive than BKK-LHR-BKK. (or any XXX-BKK-XXX < BKK-XXX-BKK).

Edited July 27, 2015 by bamnutsak

[kerrysum]

i just dont understand, dont they know the growth rate of tourism here, tat should run this airline

heh heh.

its probably a real move to stop or slow the bleeding.

but it is terribly managed. I stopped flying them years ago, along with many others.

and it is a very competitive marketplace. it is not easy to operate an airline. it requires huge investment in assets and maintenance. these issues alone demand competent management. dealing with the competition is another.

they have to exist - Thailand needs a national carrier for many reasons. there are many locations that need service, and so many state employees, officers, retired employees, families, and so on that need tickets, etc. and everyone wants a free ticket.

so, it will go on making a loss with the money coming from the national coffers, until forever.......

No truer words ever said...... It has been this way for years.... The free ticket gig has been reported for years.... Call it bad management in my opinion.......

And it is true, their prices have always been double.... Suck it up Thai Airways, because there nothing more to suck up.....

What a shame..... Or maybe, it is ok, it is about time......

[thaiowl]

Bailing before they get banned, this is how they are going to get enough qualified staff, reduce the size ergo the need for so many they havnt got.

The FAA will be the first International agency to shut them down, since they cannot maintain the aircraft properly. so they decided to stop all traffic to america to "SAVE FACE"

A source at the Thai DCA said it's going to take years to get the DCA in order. Some ex-CASA (Australia’s DCA) guys are coming next month. Apparently there are no 380, 787 and 777 inspectors in the whole of Thailand.

[USNret]

Maybe the dollar-to-baht exchange rate has something to do with it. TG not getting such a good deal when they repatriate their money.

[Cats4ever]

Thai were once a great choice to fly to MEL. Then the prices went up. Management was obviously the problem.

I hope they get it right. Inflight was always good.

[Lupatria]

Do they have a special "University of Mismanagement" here?

[halloween]

TG "owns" two slots at LHR, they have to use them (or lease them to another carrier) or lose them.

Slots at LHR are limited and relatively valuable, although VN did a get a newly created slot recently.

They ceased the second flight on 1 July 2015, will begin again on 25 Oct 2015.

LHR-BKK-LHR will always be less expensive than BKK-LHR-BKK. (or any XXX-BKK-XXX < BKK-XXX-BKK).

Things may have changed, but some years back I was commuting regularly from Sydney. It was considerable cheaper to buy return tickets in BKK than on-line in Oz, though I had to have my next trip paid for before I went home as they wouldn't let me board in SYD without a return flight.

Flying with Olympic cheapest at the time - sometimes I got a FREE 2 hour stop-over in Melbourne.

[elgenon]

Yea, they are "pulling out" of the American market because the US is banning them because of safety concerns. That is the real story.

Now if the government would let a private entity run the railroads as well as the airline they might actually get better. But the unions are strong. The government is between a rock and a hard place.

[bamnutsak]

Things may have changed

Yes, they have. There were some geographical pricing inconsistencies, and currency arbitrage, back in the olden days. Hence the "deals" we used to get ex-JNB, CAI, CMB and to a lesser degree BKK.

More than 60% of TG's revenue comes in in foreign currency (JPY, GBP, EUR) so Fx rates can have a significant impact on TG's top-line, as all stated financial results are converted to THB.

My sense is that they are "pulling out" of the U.S. as four weekly flights is probably not enough to justify the ground expenses, and they can codeshare any traffic onto to partner metal to/from the U.S.

Edited July 27, 2015 by bamnutsak

[SiSePuede419]

1400 people to fly to only one airport, LAX?

That's OK. It's not like there's a bunch of Asians in Los Angeles who want to fly to Bangkok.

5555

Edited July 27, 2015 by SiSePuede419

[needforspeed]

TG 665.

yesterday, from Shanghai to Bangkok.

We stayed in the airplane waiting for 4 hours before it took of to Bangkok, only information been given 'Queing for departure".

Traveling economic class no option to charge phone (USB), bad service, bad food (dry bread, vegetable no taste, small wine glass, salad 7 small prawns no dressing or sauce) and after 4 hours on a full and hot airplane bad smell.

Should arrive 21:00 in Bangkok, arrived 01:10.

No smile for me yesterday, and not again.

[Caspersfriend]

It is usually considerably cheaper to fly from BKK to LHR [or most other 'western' cities] than it is the other way around. Go figure.

[hawker9000]

THAI's BKK-LAX route was a loser from the get-go. They charged twice as much for the flight than any other carrier, with the only selling point being that it was a non-stop flight. It should have been scrapped years ago.

THAT flight (BKK-LAX) actually WAS scrapped years ago. Here they're talking about the stopover route through Seoul.

Hmmm. 'Seems THAI and TAT have two different views of the Thai tourist market ... Lol. I know who I believe. Money talks.

[shaurene]

The free tickets scheme is a Government thing not the Thai management. It would save Thai Air many millions. It has surprised me that our good PM never made this a number 1 priority.

MP's and the rich hangers one have got the money to pay for their own flying trips, when on business the Government should pay for their MP's and the rich business hangers on can get their companies to pay like every other country in the world.

This is why Thai are so dear they have to make the paying passengers pay for all these free bee's.

Need a real tough CEO to stand up to the government interferes.

[toenail]

It is sad to see an airline that was reputable and profitable airline 20...30years ago slowly decaying away. -But the airlline businness is a tough one to keep from sinking, look at how many airline companies in the United States or Europe have gone under or forced to sell consolidate? True, high fuel costs and more competition have been challenges for Thair Airways, but the main factor is poor management. Give them credit, the airline attempted new routes such as flying to New York city and LA nonstop. Though the planes flew 80% occupacy (according to my research) the airline company found these two routes not profitable due to high fuel costs. But I feel it is due to poor management and instead of getting rid of the Thai employees at the bottom, the company should start at the top and not be afraid to hire expats to do the high-tech jobs until they can effeciently run the business again by themselves. (part of the problem is the culture which is always into saving face instead of facing reality.)

[NicoBKK]

The only direct flights one can take to Italy are operated by Thai -as Alitalia is no longer flying over here- but they are always far too expensive compared to KLM, Lufthansa, Etihad, Qatar... nearly double the fare in Economy class. A pity, but sorry Thai, myself and my family are not going to go for them.