Thai Airways struggles in tough market

Airline faces resilient LCCs, Mid-Eastern carriers and uncertainty

As it takes delivery of its first Airbus A380 in Toulouse, its colourful livery making an attractive superjumbo, Thai Airways admits it faces major challenges in its struggle to cut costs and stop losses. The market share of low-cost carriers in South East Asia has grown dramatically, the airline’s EVP technical captain, Montree Jumrieng, said at the delivery event. Heavier competition, bigger fuel costs, economic uncertainty and aggressive marketing by Middle Eastern carriers and their hubs all add to the burden, he added. Thai Airways’ share of the domestic market has dropped dramatically in recent years from 83.8% to just 39.8%. Its share of the regional market has fallen from 42% to 33%.
Thai Airways’ “low- to medium-cost regional carrier”, Thai Smile, began operations in July. TG is also a major shareholder in Nok Air, a domestic LCC aiming to launch international operations in 2013. However, plans to start another low-cost airline in partnership with Nok Air have been called off for now.
But Thai Airways says it is looking forward to the implementation of the ASEAN Economic Community in 2015, which will remove border controls between the ten member states.
[photo courtesy Thai Airways]


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