Friday, June 27, 2008

THAI Airways focusing on neighbouring markets


Good news for anybody traveling to Indochina region...

THAI pledges to maintain the same frequency for the Mekong region that also includes Myanmar, despite lower demand and rising fuel costs.

Looking at the future potential of the Mekong region, rather than the present hardships resulting from high oil prices, Thai Airways International will maintain the same frequency throughout in the region believing neighbouring countries are strategic to the airline’s long-term business plan.

THAI director Area Thailand, Indo-China and Myanmar, Krittaphon Chantalitanon, said that the growth rate for the Mekong region and Myanmar would average around 10% this year.

Since this region is a leisure-led market, he said the performance is easily affected. The cost of oil is the top concern as it affects the overall economy. People are more cautious in spending. The airline cannot compensate for the overall cost of fuel with just a fuel surcharge.

“Although we constantly review our fuel surcharges and fares, we cannot catch up because it (oil price) goes up on weekly basis, even daily, but we cannot adjust the fares and surcharges that often,” he said.

Political instability in this region as well as unpredictable natural disasters also plays a role.

“We realise negative factors are surrounding us, but we have to go forward, though we are not able to jump like in the past. We will keep monitoring and maintaining business relationships with our neighbours.”

Over the past three years, THAI’s focus was on long-haul services, but it has now shifted to regional routes.

“We have to realise the significance of our neighbours. This region has high potential to grow, so we have to lay the foundation and develop relationships and grow with them into the future.”

As THAI positions itself as a hub airline for the region, it is affected by competition from home-base carriers as well as long-haul carriers that fly direct or use Bangkok as a turnaround base.

Mr Krittaphon said: “We offer the best connections in this region. Suvarnabhumi is a hub and that is our home base so we are confident we can deliver products, frequencies and capacity from the hub to cover the region and also offer connecting services to worldwide destinations daily or even twice a day.”

THAI currently uses wide-bodied A300-600s on twice-daily services to Yangon, Myanmar, that started at the beginning of the year with 17 flights a week.

There have been some cuts on this route in the wake of the cyclone disaster.

Mr Krittaphon said demand for Myanmar has decreased by around 10% since late September 200, although demand is picking up again mainly from relief agencies that are assisting the recovery in Myanmar.

Two weeks before Nargis hit the delta region southwest of Yangon, THAI was preparing to launch a holiday package to Myanmar. “We were about to unveil a package to visit Buddhist sites like we do for India’s Varanasi and Gaya. Now we have to wait and see,” said Mr Krittaphon.

As for Laos, he said services to Vientiane were fine because few airlines serve the destination and the economic growth was still positive.

Regarding the expansion of operations into Cambodia, THAI is waiting for the Asean open sky policy to take effect at the end of this year or in early 2009 so it can start a service to Siem Riep. Bangkok Airways currently holds an exclusive concession on the route.

Mr Krittaphon said in Vietnam, the airline would continue to fly to Hanoi and Ho Chi Minh City and keep its code-share agreement with PB Air for Danang. “We will not operate Danang service ourselves. It is not practical for a full operation.”

The airline operates 18 flights a week to Ho Chi Minh City and 14 flights a week to Hanoi using A300-600s

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