THAI plans to woo more locals

Strong baht and increased purchasing power of locals behind strategy

Thai Airways International (THAI) will focus more on catering to Thai passengers flying to international destinations due to the baht's rise against various currencies, as the national carrier looks to secure its sales performance amid a stable economy and locals' increased purchasing power.

Starting with Japan as the airline's major market, the firm will increase the number of seats available for Thai passengers. In recent months, the Japanese yen has fallen 20 per cent against the baht. The US will be the next target under the plan, along with some counties in Europe, according to Danuj Bunnag, THAI's executive vice president for commercial.

Currently, THAI flies to five cities in Japan with 68 flights per week. However, the firm will have to take a look at whether or not it has sufficient seats available for the plan. For example, the Bangkok-Frankfurt route faces a cabin factor of 98 per cent on some flights. Cabin factor is the percentage of available seats sold. So far, Danuj said, the firm has not seen any negative financial impact from the stronger baht against the US dollar because the firm's earnings are in different foreign currencies, which balance out. The same is true of the firm's borrowings.

This year, he said, has been a good one for THAI. The firm has maintained its earlier projections. It expects to see an increase of 12 per cent in total sales and a 3-4 per cent rise in yield, thanks to a 9-per-cent rise in seat numbers over the previous year. Its cabin factor for the whole year is projected at 76-78 per cent.

"Overall, all markets are good. Europe is not as bad as expected. Asia is very good, while Thailand is upbeat,'' he said.

By the end of this month, the firm will launch a flight from Bangkok to Mandalay in Myanmar on its THAI Smile brand, aimed at connecting passengers from Europe and Japan flying on THAI. Phuket-Delhi and Phuket-Mumbai destinations will also be launched. Throughout the year, the firm will increase the frequency of existing routes.

This year, especially during the low season, the firm will adopt a strategy of offering extra services. Full-service and low-cost carriers will not compete with each other in a price war, but will offer increased services instead. Overall, ticket prices will increase by between Bt200 and Bt300, thanks to the booming tourism sector, Danuj said.