Addendum
No more excuses warns THAI boss
July 1st 2016
Thailand remains Europe’s favourite long-haul getaway. Read More » But with Middle East airlines putting evermore flights into the kingdom and beyond and short haul budget airlines building market share at the expense of the country’s flag carrier, Thai Airways International (THAI) president, Charamporn Jotikasthira, might sometimes wish he was back at his old job running the country’s stock exchange.
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This month alone, Emirates Airline added a seventh daily A380/B777 frequency into Bangkok’s near-capacity Suvarnabhumi airport and fellow Gulf carriers, Qatar Airways and Etihad Airways, have maintained a high frequency schedule of four times a day services to the Thai capital, as well as flights to the resort destination of Phuket.
At the most recent Star Alliance CEO conference in Zurich, Charamporn conceded to Orient Aviation that there were problems for THAI when it came to completing its three year structuring program.
“Last year we had the excuse of grounding so many aircraft. We had to reduce everything, but this year we have to benchmark against the world’s best,” he said. THAI is investing in a new web booking engine and an up-to-date IT system and is upgrading a very uncompetitive premium cabin.
In tandem with the closing down of loss-making routes to Los Angeles, Johannesburg, Moscow and Madrid, the airline has sold 25 of the 38 aircraft it grounded as part of its turnaround plan.
“Definitely, we have to reduce the number of [aircraft] types,” he said. When Charamporn arrived at THAI there were 11 types. “It’s supposed to be only five or six” going forward, he said.
Nevertheless, THAI will commence accepting its twelve on-order A350-900s from August, despite the fact the airline said it did not need them and that they were “way, way prior commitments”. He said the orders were “difficult to exit economically”.
If he could turn back time, THAI would not have ordered the 12 A350s and six B787s, he said. “We should have bought 20 or 40 aircraft at a time, for economies of scale, rather than six and twelve, which is in nowhere land.” The A350 will replace older B777s, Charamporn said.
In 2014, THAI had a cabin load factor of 68.9%. The goal this year is 80%, to be achieved with more rational capacity management, more efficient sales and marketing and better network planning. “Above 80%, and we’ll make a profit for sure,” he said, but admitted “this year will be a tough one”.
The airline has tweaked its schedule to offer better hub connectivity to 28 cities, particularly between Europe and Australia, once the carrier’s bread and butter. Also, Charamporn said, Thailand’s airport authority had allocated concourse C at Suvarnabhumi exclusively to THAI. The airline will redecorate the area “THAI Airways style”, and “manage our own aircraft better”, the president said.
Charamporn believed THAI will always be a hub carrier, although several new airlines are serving the country’s secondary cities point to point. “Mind you,” he said, “we have Nok Air, so we can use it for this.” He said recent media reports that claimed THAI would sell its 39% equity in the LCC were “false”.
Regionally, THAI intends to develop partnerships with as many as ten airlines in ASEAN (Association of South East Asian Nations) to counter the recent advent of the LCC alliances, Value Alliance and U-Fly. Long haul, he would like to add Seattle or Vancouver to the carrier’s network, using the A350 or B787, when Thailand regains its Federal Aviation Administration Category 1 certification.
He said Chicago and New York, where alliance partner, United Airlines, is strong, remain on THAI’s radar. At press time, the 56-year-old airline had announced a four-weekly return to Moscow and a new three times a week service to Tehran from November.
