THAI cuts revenue target again

"The company has cut some international routes and reduced frequencies and this affects the revenue," said Pruet Boobphakam, the newly appointed executive vice president for the commercial department, at a press conference yesterday.

He did not say if this would affect the company's target to return to profitability this year. "We have to wait and see how the situation will be in the last quarter of the year."

The airline earlier this year expected its revenue to fall 10 per cent from Bt200 billion last year, because of the shutdown of both Bangkok airports late last year. Due to the local political turbulence, the global economic crisis and type-A (H1N1) flu, the target has now been further lowered.

The Association of Thai Travel Agents (ATTA) said the number of international arrivals this year is expected to be 11.5 million, down from 14.5 million last year. Hotel operators on Tuesday reported that advance bookings remained slow, but said they expected improvement in the last quarter of the year.

THAI now earns 80 per cent of its revenue from overseas operations. And 70 per cent of revenue is from economy-class ticket sales.

According to Pruet, the airline is focusing more on online ticket marketing, through cooperation with alliances. Competitive prices for the wide network are expected to draw more travellers. Moreover, THAI will also focus more on corporate travellers, particularly those from small and medium-sized companies. It also is set to increase the ratio of the company's direct ticket sales.

At present, 60-70 per cent of revenue is generated through travel agents, 3-5 per cent from online channels and the rest from individual travellers and the corporate market. The aim is to boost online sales to 20 per cent, in line with other major airlines like Singapore Airlines.

The airline will also consolidate and develop existing key markets through code-sharing agreements rather than opening new routes.

Meanwhile, Nok Air will also play a more important role, Pruet said.

Nok Air was established to beat low-cost airlines, especially Thai AirAsia. It is expected to resume overseas operations, which were abolished due to high oil prices last year.