Y. J. Foo 0 Report post Posted June 6, 2008 (edited) Oil price forces thai airways to retrench By Suchat Sritama The Nation Published on June 7, 2008 10-year plan to be revised, with routes and aircraft procurement at risk Skyrocketing oil prices have clipped Thai Airways International's wings, forcing the flag carrier to retrench on its 10-year business plan, including possibly paring routes and new aircraft procurement. "The airline's revision will also include its revenue projection," THAI president Apinan Sumanseni said yesterday. "THAI's revenue this year will fall short of the target of Bt210 billion," he said. The new plan will be finalised by next month, but the airline has already decided to close its long haul Bangkok-New York route in July and cut frequencies to Los Angeles, London, New Zealand and Johannesburg due to higher jet fuel expenses, he said. On July 1, the New York station will be closed down and flights to Los Angeles will be reduced from seven a week to five. "The company has already lost Bt4 billion per year for the two long-distance routes to New York and London," he said. The oil price is the key driver of the cost of operations. The jet fuel price has jumped from US$270 per gallon last year to $400, which hits all airlines, he said. The four A340-500s used to service the Bangkok-New York route will no longer be needed and sold off. The company bought the aircraft for $130 million (Bt4.3 billion) each. The long-haul routes are struggling the most because they consume much more fuel. The Bangkok-New York flight was launched in May 2005. The airline is running an average load factor of 80 per cent on the daily flights, but the return is still poor due to fewer premium seats. Major rivals including Singapore Airlines still operate the route but have transformed all seating to business class, which gets higher rates. THAI is studying reducing frequencies to London, Johannesburg and other destinations. The airline will also revise its route from Bangkok to Oakland, New Zealand, by adding stopovers in Sydney or Melbourne. The plan is set to start in October. However, traffic to India is picking up so it will increase flights to New Delhi, Mumbai and Kolkata. http://nationmultimedia.com/2008/06/07/bus...ss_30074952.php This is bad... And I think it's hard to find buyers for these in this market condition... Edited June 6, 2008 by Y. J. Foo Share this post Link to post Share on other sites
S V Choong 4 Report post Posted June 6, 2008 I can see TG returns with AKL-SYD-BKK... rather than AKL-BKK direct. Share this post Link to post Share on other sites
BC Tam 2 Report post Posted June 7, 2008 Isn't Dato TF on the look out for long haul birds for AK X ? Share this post Link to post Share on other sites
Mohd Azizul Ramli 2 Report post Posted June 7, 2008 There goes ThaiA345's favourite flight. Poor Mr. Kwee! Share this post Link to post Share on other sites
Cheng Kit 0 Report post Posted June 7, 2008 Probably like MAS in 2005 when they lost RM1.3 billion Share this post Link to post Share on other sites
Tamizi Hj Tamby 1 Report post Posted June 7, 2008 Whoa What a suprise! How many A345 does TG have in their fleet? Share this post Link to post Share on other sites
Raj 0 Report post Posted June 7, 2008 Whoa What a suprise! How many A345 does TG have in their fleet? TG has 4 A345's in their Fleet! Share this post Link to post Share on other sites
Tamizi Hj Tamby 1 Report post Posted June 7, 2008 TG has 4 A345's in their Fleet! What? No wonder they're considering about selling it... Share this post Link to post Share on other sites
Imran K. 0 Report post Posted June 7, 2008 Hmm...second-hand A345's on the market... HUGE market here in the middle east for them. Let the bidding war begin! Share this post Link to post Share on other sites
Robin 0 Report post Posted June 8, 2008 If TG sold off its A345s, can TG still provide direct flight from BKK-LAX-BKK? Share this post Link to post Share on other sites
Azmir I. 1 Report post Posted June 8, 2008 Hmm...second-hand A345's on the market... HUGE market here in the middle east for them. Let the bidding war begin! Not much for A345,poor load,cant take any underbelly cargo due to underfloor taken up by aux tank unless in pure premium flight (bussiness class suite).Thats why Air Canada got rid of theirs earlier and now TG. Share this post Link to post Share on other sites
Yusoff 1 Report post Posted June 9, 2008 TG is tightening their belt too? gosh I'll go double gosh'es if SQ selling planes too... and scrapping some routes... Share this post Link to post Share on other sites
KC Sim 2 Report post Posted June 10, 2008 Thai Airways International's nonstop to JFK has gone wrong right from the start. It was not the result of any intelligent study or strategic brilliance . . . purely to keep up with SIA. It feels that simply replicating the desttination (JFK vs EWR for SIA), using the same aircraft (but not taking note of the needs of passengers on an ultra-longhaul flight and tailoring the cabin's configuration) and beating its chest and claiming to have shorter flying time than SIA's SIN-EWR service is enough to make its service more attractive. From day one, it used all the lowest common denominator to establish the lowest price possible and ended up scrapping the barrel bottom for traffic. At 80% load factor and still not making money??? This is airline revenue management 101 indeed. The BKK-LAX service will be reduced to a five times weekly service via KIX using the A345 initially and then further shrinking to a B772ER after the former is sold. Thai's services to LAX has gone from daily to 4 x weekly before slowly climbing up to daily and now going down to five times weekly . . . is it any wonder that premium traffic sitting in the front end of the cabin steer clear of TG? It felt that it had already thought of everything (or perhaps copied it from its competitor) but failed in one key area - re-inventing service delivery tailored to the needs of an ultra-longhaul sector. I was on the inaugural A345 nonstop flight to JFK sitting in the so-called Premium Economy Class and words that continue to come to my mind include: - "Sorry sir, cold towels only for business class passnegers" - said a cabin attendant to a passenger who saw a her walking towards the biz class cabin with a tray of towels - "Is it just me or are you also very hungry?" - a passenger sitting next to me asked when we were on final approach into JFK. The two meals served on this 17-hr flight were so dismal even a kitten would curl up trying to sleep and forget its hunger. This passenger turned out to be a TG manager whose department is in charge of cabin services!!! - "Where is everyone?" - asked yet another passenger seated near me. The cabin attendants disappear for a very long period of time (at least between 6 and 8 hours) and probably assumed that all the passengers were asleep and trying to cope with their hunger - "What? Is this playtime or is this for real?" - a Caucasian passenger near me exclaimed when he saw the meal trays. They were all made of cheap-looking plastic and because they were shrunkened in size to give smaller portions, they looked like they came from a doll house The current direction of fuel price movements only came as a convenient excuse for TG to make these cuts - they were already long overdue and should have been made long ago. I wonder how long they will keep the A346 and if the A380 order will survive. Watch the news coming out of BKK. KC Sim Entering Thailand via Suvarnabhumi Airport or transiting it while headed elsewhere is for me a reason to seek alternatives. I recently had the experience of transiting BKK enroute from NRT to SIN. Stepping out of the plane park at one of the D gates on the western end of the central core of the terminal, I had to turn right and walk all the way to the eastern end of the terminal, go up two flights of stairs/escalators, head back to the west, go through security screening (and this was clogged up by long queues and manned by very rude staff) . . . head back to the gate and with barely enough time to catch my breath before boarding commenced (and all hell broke loose again - boarding of flights at this airport is almost always a stampede). Can you imagine what happens to folks who are older, cannot speak English and are not familiar with the way around this airport? In most airport, transit involves only deplaning, walking around and returning to the same gate - all on one level. And some of the gates have wooden boards that partitioned off sections . . . amid all the unpainted grey concrete and looking like a gladiator's fighting ring. With its lack of strategic thinking, diverse fleet (to be made more diverse by the addition of A380s, B787-9s, A350s etc), poor regional network in SE Asia and one hell of a home base airport . . . I wonder how it is going to be able to employ the A380s and get adequate returns on this investment. About three years ago, it was clear they did not have any route that could sustain profitability all year round . . . today, I think there is even less of a chance of them doing so. If services to a slot-constrained airport such as LHR cannot be sustained using B744s . . . what more an A380. Share this post Link to post Share on other sites
