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Published on March 6, 2008

Thai Airways International (THAI) recently revealed a 10-year plan to focus on the regional market and appeal to premium flyers.

The two strategies are based on new aircraft THAI has ordered, mostly mid-range types. Since the number of air travellers in Asia will grow quickly over the next decade, mass air traffic will be upgraded to serve the upper-end market or premium travellers who demand better services.

"In Asia for now, many people are ordering private jets, which means they're searching for luxury and a special mode of travel," said president Apinan Sumanaseni.

To tap the growing market, the national carrier will start adding more routes in the region over the next couple of years. It will begin direct flights between Phuket and Seoul in July, with two a week.

The airline will add more frequent flights between Bangkok and Bangalore, India, this month, rising from seven a week now to 20. Also this month, it will increase its number of flights between Bangkok and Madras, India, from four a week to seven.

The airline is considering re-routing two long-haul flights between Bangkok and Los Angeles or New York by adding South Korea or China as stopover stations.

Apinan said the airline had leased 14 Boeing 787-900 aircraft, scheduled for delivery from 2012-15. THAI plans to use the aircraft for regional operations.

THAI also agreed to place a down payment for 20 Airbus A321 aeroplanes, scheduled for delivery from 2012-17. With a capacity of 179 seats, the short-range Airbus A321 is suitable for domestic and regional operations.

The Boeing 787-900 and A321 aeroplanes will replace retired aircraft from the THAI fleet and be used to accommodate growth over the next 10 years.

The new aircraft will use less fuel and therefore minimise effects on the surrounding environment.

Apinan said the airline would focus more on business and corporate travellers by adding more first- and business-class seats.

Six Boeing 777-300s have already been upgraded and another six are being renovated. The improvements will be completed by September.

The airline is spending US$120 million (Bt3.79 billion) for the upgrade, which will take three years.

The airline also plans to increase ticket prices on three major routes between Bangkok and Europe, Australia and the US.

THAI is also responding to customers' misperceptions that the airline favours foreigners over Thais, a finding that came from a recent internal survey. The airline is running a domestic "Smooth as Silk" campaign to reclaim customers.

With all of the improvements, the airline expects to generate more revenue this year, projected at Bt210 billion from between 19 million and 20 million passengers.

Apinan said the average cabin factor in January was the highest in 47 years of operations, 82 per cent, up from 80 per cent in January 2007.

"In January, the cabin factor in first class was very good, 60 per cent, up from 50 per cent in January 2007. Business class also jumped from 60-62 per cent to 75 per cent," he said.

THAI's annual load factor is normally about 72 percent.

The growth was driven by a new campaign in which the airline has been approaching private companies.

THAI's revenue from the sale of goods and rendering of services during last year's fourth quarter totalled Bt53 billion. Its net profit stood at Bt1.8 billion, down 54 per cent from year on year.

As of the end of last year, assets belonging to THAI and its subsidiaries amounted to Bt280 billion.

Suchat Sritama

The Nation