Friday, May 21, 2010

TG faces prospect of major alterations

Thai Airways International (THAI) may have to make a radical change to its near- to medium-term business plan in line with the sharp downturn in traffic caused by Thailand’s deadly civil unrest.

The flag carrier’s top management is considering all possible options including frequency cutback, rescheduling and merging flights or even suspending services in some routes.

It plans to summon all its managers stationed overseas for a meeting in Bangkok later next week to revise its business plan that reflects the grave situation in the kingdom.

Other Thailand-based airlines such as the budget carrier Thai AirAsia are deep in thought about rationalising their flight capacity to fall in line with the downturn in passenger traffic.

Airlines, especially THAI, have seen its passengers through the Suvarnabhumi Airport plummeted further in the past two days as the political turmoil turned even more bloody.

According to Airports of Thailand, total passenger throughput at Suvarnabhumi has continued to drop, falling from about 69,200 on Tuesday, to an estimate of 60,000 on Wednesday and about 55,000 yesterday.

The volume will certainly continue to diminish in the next several days, Nirandra Theeranartsin, general manager of Suvarnabhumi Airport, said yesterday.

The fallout has further compounded the low-season effect that has already left carriers struggling to fill their empty seats in the six-month period to October.

In the last few days, THAI was able to now fill 56-62% of its seats, down from about 65% earlier this month.

The airline especially saw a significant decline in passenger flows to Thailand, with fewer than half of the seats on incoming planes were filled, as more than 50 countries advised their citizens against travelling to Thailand.

Airlines are concerned about deeper and longer impact unless the political turmoil, which already claimed over 70 lives and wounded more than 1,300 people, is effectively put to rest soon.

“We definitely need to reduce capacity soon to match market demand,” Surapol Isrankura na Ayutthaya, head of the crisis management at THAI, said yesterday.

Thai AirAsia chief executive Tassapon Bijleveld also recognised the need to further reduce flight capacity in the wake of Wednesday’s surrender of red-shirt leaders and wide-spread rioting that followed.

“We’ve yet to determine the size of the cutback, pending the assessment of the fallout,” he said.

The low-cost carrier’s cabin factor stands at only about 60%, and most of its seats on flights from overseas are almost empty.

THAI is envisaging fewer bookings these days with outstanding reservations are only at 60%, an alarming low rate in THAI’s standard.

Thai AirAsia is devising a couple of campaigns to woo back passengers on the airline’s flight after the current crisis ends.

The nature of the aggressiveness of the campaigns will depend how the market responds to the political clashes turn parts of central Bangkok into a war zone, according to Mr Tassapon.

Meanwhile, Australia’s Qantas Airways let passengers delay trips to Thailand or bypass the kingdom without penalty as deadly violence escalates in Bangkok.

Passengers who have already bought tickets can defer trips in and out of the country, bypass Thailand as a stopover port and even change destinations at no extra charge, Qantas said in a statement.

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