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Tuesday, June 7, 2011

IATA: Thai ramps up to tackle competition

Tackling intensified competition in premium, low-cost and regional markets are behind moves by Thai Airways to bring in new aircraft and its recently launched new airline projects.
The Star Alliance carrier is close to finalising an order for 37 aircraft, a mix of 11 narrowbodies and 26 widebodies, for delivery between 2012-17. "We are looking to decide very, very soon," says Thai Airways president Piyasvasti Amranand.
Upgrading the fleet, both through aircraft renewal and retrofits, is a key to a carrier facing intense competition at the premium end. "On routes where we have a good product we were able to increase passenger traffic," he says, pointing to rising traffic on its Bangkok-Paris route where it deploys its new Boeing 7770-300ER equipment. But routes where it operates its older 747s, passenger traffic declines against high-end competition. "So we need to move ahead even more quickly with the retrofits and replacing older aircraft with new aircraft."
The carrier, which has just announced plans to retrofit a dozen 747s, is in the process of taking seven A330s and will next year add its first three A380s and the first of eight more Boeing 777-300ERs on order.
The fleet renewal has involved replacing older aircraft, but it will now grow its fleet from 85 next to year to more than a hundred by 2017 "It will be the first time in five years we have seen our fleet size growing," says Amranand.
The 11 narrowbodies it is set to order will be for its newly unveiled plans to launch a regional carrier. The still to be named operation, with the working name Thai Wing is set to launch in the second quarter of next year when the first of the new narrowbodies are delivered.
This comes on top of plans to launch Thai Tiger, a low-cost joint venture with Tiger Airways announced last year but which is still to launch. Armarand says both moves, and it only having a minority stake in existing domestic low-cost operation Nok Air, are ways to address the regional and low-cost segments of the market.
"The most rapidly growing part of the market has been at the lower-end of the market. The penetration of the low-cost carrier has been enormous and they have taken market share, because we don't have any low-cost carrier of its own," he says. "That's why we need to address the low-end and smaller-end of the market."

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