ThaiInter:HighCabinFactor

[jpatokal]

State operator THAI mysteriously plunged from a solid profit into a massive loss in 2Q, president Kanok has been put on leave and there are sordid whispers of cooked books. Now THAI is cutting routes left and right and firing staff... What exactly happened? :confused:

http://www.luchtzak.be/article9677.html
http://www.luchtzak.be/article9742.html
http://www.luchtzak.be/article9758.html

[ncr]

Related news:

Nok Airways to run three of its parent's routes (http://www.nationmultimedia.com/2005/08/20/business/index.php?news=business_18390597.html) - The Nation, 20 August 2005

Thai Airways International is giving three old aircraft to its subsidiary Nok Air, for use on the low-cost airline’s three new routes following the withdrawal of the parent company from those operations.Two ATR aircraft will operate the Chiang Mai-Mae Hong Son and Bangkok-Phitsanulok routes, while a Boeing 737 will serve the Bangkok-Trang route.....[...]

[The Enforcer!]

Thai's troubles are not just Q2 ... it has been losing trade for years as it failed to invest where other airlines did .... I stopped using Thai (even with my Gold card on Royal Orchid) because EVA economy Deluxe (now called Evergreen Deluxe or Elite) is far better and cheaper than Thai Business class!

Their pssenger relations is also appalling ... my last flight out (TG409 09.07.05) left 2¾ hours late ... no apology ... no explanation .... certainlyno compensation!

I fly Thai when there no alternative!

The Enforcer!

[ncr]

Breaking News (http://203.154.97.18/breaking/read.php?lang=en&newsid=111658) from The Nation:

THAI may create new domestic carrier

Thai Airways International Plc (THAI) said Thursday it is considering launching a new domestic airline after reports that it would separate its domestic and international business.

Thai Airways is currently conducting a feasibility study on the proposal, according to the air carrier's spokesperson. "The new airline would offer a more luxurious service than the existing low-cost airline," she said, referring to the company's budget carrier, Nok Air, which mostly operates domestic routes.

The new airline, to be called Thai Orchid, would start operations this year and would be wholly owned by Thai Airways International, unlike Nok Air which has other shareholders. It said it would probably operate from the existing Don Muang international airport, which is to be superseded by the new Suvarnabhumi Airport due to open later this year.

The move would return Thailand to the situation that existed before 1988 when two carriers operated, dealing with the domestic and international market respectively.

*****

What is strange: why would they want to operate from Don Muang??? Doesn't make sense. And I thought it was already decided that all regular (non-private, non-charter) domestic flights would be moved to Suvarnabhumi, anyway?

[jpatokal]

From http://nationmultimedia.com/breakingnews/read.php?newsid=30003018 :

Thai Airways Tuesday announced that it will launch a new airline for domestic and regional routes as part of its effort to tackle stiff competition from budget rivals.

The airline, called Euarng Luang, will target the mid-range market and will begin operations later this year, flying to Laos, Cambodia and Myanmar, Thai Airways new president Apinan Sumanaseni.said. It will take about two months to set up a new company that will operate flights for domestic routes and neighboring countries, he added.

Euarng Luang, which means Royal Orchid, will be positioned differently from

NokAir, Thai Airways' low-cost subsidiary, and is aimed at attracting customers from premium and budget rivals, Apinan said.

Euarng Luang will fly from Bangkok's existing Don Muang airport before moving to the new Suvarnabhumi Airport which is expected to open after much delay by the end of the year.

Interesting choice of target destinations, but how will they get the landing rights and is there really a market for new full-priced flights to them? Or if this just a Singapore Airlines/Silkair-style sleight of hand trick to dispose of low-volume, high-yield routes using Thai's existing traffic rights? I hope they have the sense to use the name "Royal Orchid" in English, or this will soon be the most mispronounced and misspelled airline in the world...

[GWR]

I've been under the mistaken impression for several months that it was going to be called 'Bua Luang'.:confused:

[ncr]

See also an earlier announcement mentioned in this (http://www.angkor.com/2bangkok/2bangkok/forum/showthread.php?t=1521) thread.

[jpatokal]

But the new article here lists the target destinations as regional (Laos, Myanmar, Cambodia), not domestic. :confused:

[ncr]

Yeah, I can't make heads and tails out of this. :(

Maybe Thai Airways should overhaul their (dis)information policy?

[jpatokal]

More weird things afoot at THAI -- now there are reports that they've sold their 4 MD-11s (http://www.luchtzak.be/article11620.html), probably to UPS for freighter conversion, and are shopping for 767s. While the MD-11 is a bit of a lemon and TG has already let it be known that they're on their way out, the timing of the move is unusual as they were only recently repainted in the new livery... and the choice of 767 as the successor is odd, as THAI has none at the moment and it's about to be phased out by the 787.

[christao17]

That's bizarre - I can't imagine TG adding the 767 to their fleet. It is an out-of-production aircraft that is not terribly more economical than the MD11. Perhaps "787" was meant, as I could see TG using it to add more long and thin routes out of BKK.

[Dionysus]

No matter whether it will be 767 or 787 but please not another aircraft type in their fleet!! TG already has the most diverse fleet in the region.

A380-800 (coming)
747-400
747-300 (I hope they will go away soon)
A340-600
A340-500
777-300
777-200ER (coming soon)
777-200
A330-300
A300-600R (two engine types, GE and PW)
B737-400
ATR 72

That's 12, world class airline like SQ only has 6 (including A380). They used to try to reduce the aircraft type but now they are messing it up again. The more types you have the more expense incurred. Seems to be TG style to have highest operating expenses as possible.

[jpatokal]

I gather the A300s are also on the chopping block? (And good riddance, I say, they still use the things on BKK-SIN and I always feel like I've entered into a timewarp to the eighties when I board one...)

Also, if this "Royal Orchid" subsidiary thing goes ahead, they will hopefully be smart enough to offload the smaller planes there. This is how Singapore Airlines/SilkAir do it -- SQ flies nothing smaller than a 777, and MI flies nothing bigger than a 737/A320.

[Ganyc]

Euarng Luang sounds classic. Maybe it is the Thai version of Etihad Airways or Valuair with no town office.

I thought it will be better to name it as Suvarnabhmui Airways.

[ncr]

THAI scraps plan for new low-cost carrier (http://etna.mcot.net/query.php?nid=23207) - TNA, 10 July 2006

CHIANG RAI, July 9 (TNA) - The Board of Directors of Thailand's national carrier Thai Airways International (THAI) approved the scrap of a plan to set up another low-cost subsidiary. Instead of setting up another subsidiary (to have been called Royal Orchid Airlines), THAI will instead plan to compete directly with low-cost carriers, considering that it is already a major shareholder in Nok Air, a domestic low-cost carrier, according to the national carrier's president, Apinan Sumanaseranee.

Speaking to reporters after the Board meeting, Mr. Apinan said another low-cost airline is unnecessary as THAI owns 39 per cent of Nok Air. In addition, once Suvarnabhumi International Airport opens in September 28, it will become an aviation hub accommodating many charter carriers. With these considerations, Permanent Secretary for Transport Wanchai Sarathuntat, who chairs the THAI board, acknowledged and approved the decision.

The plan for THAI to form an added budget subsidiary was initiated by caretaker Transport Minister Pongsak Raktapongpaisal who thought that THAI should optimise business opportunities with the potential of the Suvarnabhumi Airport. Mr.Wanchai said THAI is now devising new strategies on staying competitive against the low-cost carrier sector by expanding more options via internet booking. (TNA)-E007

[jpatokal]

Quite an interesting article in the Bangkok Post (http://www.bangkokpost.com/Business/11Nov2006_biz63.php):
Thai Airways, which has been banking on the Indian market as a big growth engine for the future, has just added flights to three more destinations in India.

Two weeks ago the national carrier began flying to India's new information technology centre, Hyderabad, and the holy cities of Bodhgaya and Varanasi. These destinations are in addition to the five already served by the carrier: Delhi, Kolkata, Mumbai, Bangalore and Chennai. With the addition of three new destinations, it has 40 weekly departures from India.
Bodhgaya, a major Buddhist pilgrimage site, is an interesting choice that should draw Thais as well, but the choice of Varanasi (a Hindu holy city) seems rather more unusual. But Thailand does have a very good image in India (there are tons of agents and promos offering trips to Thailand, esp. Bangkok), so maybe they're hoping to cater to Indian tourists, not Thai ones.

At the second India-Asean summit in Bali three years ago, former prime minister Atal Behari Vajpayee proposed an open-skies policy with Asean as part of a free trade agreement (FTA) planned with the 10-nation trading bloc.

As a result, THAI, Malaysian Airlines, Singapore Airlines and Cathay Pacific have all increased capacity out of India. India and Thailand also recently signed a new air services agreement that will increase the number of seats by 10,000 per week over the next three years. ...

Jet Airways is scheduled to start its Thailand-India flights sometimes during early 2007. The boom in the number of airlines and flights comes at a time when tourist traffic between India and Asean countries has been growing at 16% to 18% annually.
Now if they'd only get India's airports up to speed -- on a typical day, like yesterday, DEL was so congested that the gate lounges ran out of space to sit on the floor!

[jpatokal]

More bad news for Airbus: Thai is threatening to cancel its A380s. A decision is expected in Feb 2007.

http://www.luchtzak.be/article13029.html

This comes on the heels of Fed-Ex cancelling its order for 10 A380 freighters. (Not an entirely bad thing; freighters are less lucrative for Airbus than passenger jets, and now they have a little extra slack for delivering the rest.)

[GWR]

AIRLINE INDUSTRY
THAI will keep all its domestic routes

Thai Airways International (THAI) has revised its operating plan and decided not to transfer any domestic routes to its budget subsidiary, Nok Air.

THAI president Apinan Sumanaseni confirmed yesterday that the airline would maintain services on all domestic routes despite having earlier announced it would continue flying only four major routes, between Bangkok and Chiang Mai, Hat Yai, Phuket and Krabi. THAI will discuss other kinds of cooperation with Nok Air, he said.

Under its revised five-year business plan, both THAI and Nok Air will operate the same routes together, because they are focusing on different markets, Apinan said.

Earlier, THAI withdrew from or decreased some of its domestic flights and gave up some routes to Nok Air, such as between Chiang Mai and Mae Hong Son. It was expected to release more routes to Nok Air for business reasons.

However, Wallop Bhukkanasut executive vice president for THAI's Commercial Department, said the company had increased domestic airfares, in order to earn higher revenues from local flights.

"THAI gave some domestic routes to Nok Air because of our poor performance, but now we're happy, with better returns, and there's no need to transfer any more routes to Nok Air," he said.

Nok Air was established as a low-cost carrier in 2004. Its major shareholders are THAI, with a 39-per-cent stake; and Krung Thai Bank, Dhipaya Insurance and the Government Pension Fund, with 10 per cent each. It has registered capital of Bt500 million.

THAI is planning to invest in more facilities and services, to show its sharper focus on the domestic market. It is considering a second in-town check-in facility at Sukhumvit subway station in Bangkok. The national carrier's first in-town check-in counter, at Lat Phrao subway station, cost Bt10 million and was established to cope with last month's reopening of Don Muang Airport.

THAI has also opened a Royal Silk Lounge at Krabi Airport to provide facilities for Royal Silk Class passengers, Royal Orchid Plus Gold Card members and Star Alliance Gold Card members. The airline operates 32 flights a week between Krabi and Bangkok.

The airline has also introduced a prepaid THAI Value Plus Card called the Aussie Easy Pass, aimed at THAI travellers heading for Australia. The card comes with two prices: Bt23,000 for economy-class travellers and Bt60,000 for business class. It allows travellers to fly to the four Australian cities of Sydney, Melbourne, Perth and Brisbane.

Suchat Sritama

The Nation


http://www.nationmultimedia.com/2007/04/20/business/business_30032211.php

[GWR]

Strange turnaround of events from the upbeat first post in this thread?:

Airline loses customers after moving airports

By Boonsong Kositchotethana

Thai Airways International's decision to move a large part of its domestic services to the old Don Muang airport has resulted in a loss of tens of thousands of passengers who require connecting flights.

The flag carrier could have lost as many as 70,000 foreign travellers, who were transferring from international flights to domestic destinations or travelling from domestic routes to overseas, since THAI started operating through the 93-year-old airport on March 25, according to insiders.

These travellers have turned to other carriers due to the hassle and long wait in connecting with international flights - all of which run through Suvarnabhumi Airport, a time-consuming 27 km away.

Many of these passengers who may travel on THAI flights from abroad have instead used the domestic services of Bangkok Airways and the budget carrier Thai AirAsia, which have continued to operate all flights through Suvarnabhumi.

THAI operates 31 domestic flights a day through Don Muang, offering more than 8,000 seats a day, while retaining 11 flights a day at the new airport.

THAI is one of the three local airlines that opted to offer domestic flights through the old airport after the government earlier this year decided, following several policy flip-flops, to reopen the old airport for non-connecting domestic services to reduce congestion at Suvarnabhumi.

The other two players at Don Muang are THAI's budget subsidiary Nok Airlines and the local no-frills airline One-Two-Go, both of which did not experience similar problems to THAI.The response from connecting passengers has caught the national carrier's management off-guard as they believed that domestic flights allocated at Suvarnabhumi should deal with the connection issue for foreign travellers.

The THAI domestic flights retained at Suvarnabhumi, which the airline anticipated to require connections to international destinations, are those from popular tourist spots such as Chiang Mai, Chiang Rai, Phuket and Krabi.

The business loss prompted THAI's board to discuss the issue at its Monday meeting. No easy solution is seen though some executives said the airline may be compelled to cut some flights at Don Muang and return them to Suvarnabhumi.

THAI may be reluctant revert to Suvarnabhumi because it spearheaded the campaign to reopen the old airport.

THAI has spent about 20 million baht to re-establish its presence over at Don Muang.

Industry analysts said THAI's loss of connecting passengers reflects a major flaw in operating dual airports within close proximity.

The use of two airports has increased the flight transfer time in Bangkok from between two and three hours to between five and seven hours.

Critics said THAI may have underestimated the impact of passenger connectivity to its business as statistics show that there are always passengers on every THAI domestic flight who need to transfer to international flights.

THAI shares closed yesterday on the Stock Exchange of Thailand at 46.50 baht, down 25 satang, in trade worth 51.36 million baht.

http://www.bangkokpost.com/topstories/topstories.php?id=118315

[ncr]

The flag carrier could have lost as many as 70,000 foreign travellers, who were transferring from international flights to domestic destinations or travelling from domestic routes to overseas, since THAI started operating through the 93-year-old airport on March 25, according to insiders.Jeez...... not the best of wordings..... sounds like all the current facilities are that old. :rolleyes:

Well, I for one enjoyed landing at good old Don Mu(e)ang, coming back on TG from Ubon after the Songkran Holidays. Last year I would have thought I'd never have the chance again, as the airport was intended to be closed for good (to scheduled flights, at least)......

[jpatokal]

Looks like THAI isn't going to try to ape Singapore Airlines (http://www.tradingmarkets.com/.site/news/Stock%20News/762061/):
Unlike its archrival Singapore Airlines (SIA), which has extravagantly fitted its first gigantic double-decker aircraft and upgraded inflight offerings, THAI is adopting a more tame approach for its fleet of six A380s.

"We have a different positioning from SIA. Ours is based on an operating philosophy that largely maximises on the bottom line economics; the plane's ability to generate revenue,"said Pandit Chanapai, who assumed the post of executive vice-president in charge of commercial affairs at THAI on Oct 1. ...

"Space and weight taken up by the suites and business-class seats in an aircraft could well be utilised for the money-spinning economy class in our case," he told the Bangkok Post.

At a price tag of about US$300 million for each A380, THAI needs to be extremely cautious on how to utilise these aircraft to ensure that they provide a good return on investment, he added.

THAI's A380s are scheduled to be delivered to the airline in two batches of three aircraft in October 2010 and June 2011, 18 months behind schedule due to production problems at the European plane maker, Airbus.

THAI is adopting a more standard configuration, a three-class layout with first, business and economy sections in common with those in THAI's existing aircraft. Inflight amenities will be on par with those offered by most airlines at the launch dates.

Tentatively, each of THAI's A380s would be designed to carry 500 passengers, compared to 471 on SIA's first A380, which made its maiden flight from Singapore to Sydney last Thursday.

Bit of a weird quote, though: SQ is also very much focused on "maximizing the bottom line" (what companies aren't!?), they just figure that biz/first are the "money-spinners", not economy. And with only 30 seats more than SQ, I don't see too much spinning potential.

[mdechgan]

Whoever said THAI knew what they were doing?
They have some of the weirdest routes with underutilzed and over utilized planes.

Heck they are losing money on the BKK-LAX, BKK-New York route with full capacity and higher ticket prices than the competition. It took them a couple year to realize that they had to have daily flights to make a profit on this route. It also was a fiasco when they said the A340-500 was inefficient and thay wanted to get rid of them even when they were less than a year old with 1 more yet to still be delivered.

[GWR]

See two previous posts for Thai Inter's plans for the future inclusion of Airbus A-380s in its fleet:

Government halts plan for 65 new airliners

By Amornrat Mahitthirook

Thai Airways International's plan to buy 65 new aircraft at a cost of 400 billion baht might have to be passed on to the next government for consideration due to several unclear details. Transport Minister Adm Theera Haocharoen said some issues remained vague and needed clarification.

Thai Airways' board chairman and air force commander ACM Chalit Phukphasuk endorsed the plan to buy the planes on Saturday. The 10-year plan starts next year.

The national carrier is waiting for comments from related agencies, including the National Economic and Social Development Board (NESDB) and the Office of Transport and Traffic Policy and Planning, on its rationale and investment worthiness.

A ministerial source said marketing, projection and operation targets must be clearly set out before determining the types and numbers of new aircraft purchased. Issues which must be worked out in more detail include growth projection of the Asian market, particularly China and India, and market segmentation.

Thai Airways is expecting to retire 47 aging aircraft and get the 65 new planes through rental and purchase arrangements.

The airline plans to add 16 planes for long-haul flights, each with 300-500 seats.

Also on the shopping list are 29 medium to long-range jets, each with 250-50 seats, and 20 planes with 150-250 seats for domestic and regional routes.

...........

Link may expire:
http://www.bangkokpost.com/breaking_news/breakingnews.php?id=123752

[mdechgan]

No matter whether it will be 767 or 787 but please not another aircraft type in their fleet!! TG already has the most diverse fleet in the region.

A380-800 (coming)
747-400
747-300 (I hope they will go away soon)
A340-600
A340-500
777-300
777-200ER (coming soon)
777-200
A330-300
A300-600R (two engine types, GE and PW)
B737-400
ATR 72

That's 12, world class airline like SQ only has 6 (including A380). They used to try to reduce the aircraft type but now they are messing it up again. The more types you have the more expense incurred. Seems to be TG style to have highest operating expenses as possible.

A380-800 (coming)
They just had to get on the bandwagon and buy these. Well the flights to London, Paris, Sydney are really packed, so I assume they will be used for these routes. The flights to Japan are packed also.

747-400
The workhorse of the fleet. Currently serving the high density routes to London, Paris, Sydney. Soon to be replaced by the A380

747-300 (I hope they will go away soon)
These were to be phased out. They should have been a long time ago.

A340-600
A340-500
600 for high capacity 500 for ultra long haul.
Somehow I believe they were forced to buy these planes from Airbus because of of shrimp tariffs. The past management got a good deal for these planes to fly their long haul routes and were to promote the airline with these new planes to Auckland and North America. However the current management despises the planes because they are very inefficient. They are crying for the 200LR for the LAX, JFK routes.

777-300
777-200ER (coming soon)
777-200
I think to Seoul Korea, maybe some Japanese flights.
These were new planes, however the 300 and 200 series are now out of production and only the 200ER is currently produced. They were brand new but for some reason THAI made them relly old really fast. Thaksin flew 1st class on the 777 a few years ago and said the 1st class plain sucked (huay thaack).
The 777 and a340 are direct competitors. They also have different engines. However their 777s are powered by Rolls Royce to try and maintain engine commonality.
They could have made a bigger profit if they just sticked to one model and type. The three different types have different engines.

A330-300
This is were THAI makes most of their money. These are used for flights to China like Shanghai and Beijing.

A300-600R (two engine types, GE and PW)
Very very old. Were to be phased out this year. I don't know why they have two engine types on the same plane. These are to be replaced. The 787 would be a perfect replacement. However they received a good deal for A330s from their A380 compensation package. I assume the A330 is to replace these along with the 777-200ER. Thai makes alot of money flying them to Guangzhou, Xiamen, Hong Kong. Especially during the Canton Fair.

B737-400
This is where Thai makes their dough. 10,000 baht round trip tickets to domestic destinations i.e. Chiang Mai, Surat Thani and Phuket. Its something like 4,000 for one leg and another 500 for some fuel surcharge.

[GWR]

Outsourcing plan opposed

THAI union questions the airline's cargo move.

BOONSONG KOSITCHOTETHANA

Thai Airways International's move to outsource its sales of cargo services in several overseas markets has raised questions of whether the exercise serves the best interests of the flag carrier.

The airline is seeking to appoint cargo general sales and service agents (cargo GSSAs) in Taipei, Hong Kong, Singapore and Dhaka in lieu of the company's long-established branches in those cities.

The THAI union and staff are questioning the motives behind the move, which would require the airline to pay 2-5% commission on freight rates to GSSAs, an expenditure they regard as unnecessary.

The principle of outsourcing the task to help drive cargo sales does not seem to apply in these cases, they say, as the airline does not have any difficulty selling freight services on routes linked with the cities in question.

''The fact is that the bellies of our aircraft serving those cities have always been full. So how can THAI raise their revenues when they have already peaked?'' asked a THAI insider, who requested anonymity.

''When you decide to replace your own men with outsiders, it implies that it is not economical to run your own offices and that a cargo GSSA can do the job more cost-effectively while being able to assure more income to your organisation,'' he said.But that was not the case for THAI representative offices in the four cities, which have performed well, he explained.

THAI staff would be retained on the payroll to avoid labour disputes and to supervise cargo GSSAs, which raises questions of manpower management and efficiency.

Each of the THAI offices in the four cities is manned by about 10 people.

Sources said there was no guarantee that the appointed cargo GSSAs would be able to increase THAI's revenues.

It is estimated that the four offices contribute about 10% of the 25 billion baht that the airline earns on cargo in a fiscal year.

Vorapravat Suengsaeng, managing director for cargo and mail at THAI, downplayed the criticisms and said that he would provide an explanation to the union.

But he said the airline's senior management had had a mandate for two years to appoint outsiders as cargo GSSAs to increase efficiency and sales revenue from this business line while not being required to hire more staff.

Six cities including Paris, Milan and Johannesburg already have outsider representation for cargo service sales.

For the year fiscal starting on Oct 1, the airline hopes to boost its cargo revenue to 29 billion baht.


Link may expire:
http://www.bangkokpost.com/topstories/topstories.php?id=123858

[jpatokal]

Unsourced scuttlebutt from airlineroutes.blogspot.com:

THAI initial A380 route (http://airlineroute.blogspot.com/2008/01/thai-initial-a380-route.html)
THAI's planned A380 routes will include:
Tokyo
Frankfurt
London
Paris

First delivery is planned for 2010 which will seat around 500 in 3-class configuration.

THAI relaunch Japan-Phuket nonstop (http://airlineroute.blogspot.com/2008/01/thai-relaunch-japan-phuket-nonstop.html)
THAI will resume nonstop service between Japan and Resort Island of Phuket eff 03JUL08.

Existing TG643 Tokyo - Bangkok service will be re-routed as Tokyo - Phuket - Bangkok on Thursday/Saturday. Timing is NRT1000 - 1630HKT ? - 1755BKK. The service was rerouted to Tokyo - Bangkok - Phuket due to low tourist demand after 2006 Tsunami.

[GWR]

THAI posts record high cabin factor
Published on February 28, 2008

Thai Airways International (THAI) says its cabin factor, which shows use of available seats, reached 82 per cent last month, the highest ever since the company's inception.

President Apinan Sumanaseni said so far this year, THAI had benefited from an influx of Asian tourists to Thailand, particularly from China and South Korea.

Senior executive vice president Panthit Chanabhai said the cabin factor on THAI's Asian flights so far this year had risen to 79 per cent, from 74 per cent in the same period last year.

He expects the average cabin factor in the first quarter to reach 80-82 per cent, which would boost the company's quarterly income between Bt600 million and Bt800 million.

The Nation
http://www.nationmultimedia.com/2008/02/28/business/business_30066666.php

[jpatokal]

The rest of the industry calls it "load factor" though... :cool: