Fuel costs hike THAI ticket prices 

Corporate September 07, 2018 01:00

By Kingsley Wijayasinha
 The Nation


5,059 Viewed

Thai Airways International Plc (THAI) will raise the fuel surcharge rate on 58 routes starting from September 14 due to the increasing fuel prices.



THAI president Sumeth Damrongchaitham said the decision was made after a study of internal and external factors including sharply rising fuel costs, which the airline has been absorbing while competitor airlines have begun to raise their prices.

He was confident that the surcharge increase would not affect ticket sales especially during the tourism season in the final quarter of the year when cabin factor usually exceeds 80 per cent.

“Oil prices have surged dramatically, and there are signs that it will continue [to rise],” he said, adding that jet fuel makes up 30 per cent of the airline’s annual costs. “THAI is in the middle of risk management, but the surcharge increase is seen as a positive move especially in terms of competition. If we raise the surcharge and that affects ticket prices, preventing us from selling tickets, it is Thai International that will feel the effects.”

Sumeth added that the surcharge hike would help THAI compete against other airlines with full service capability. “In the past we had to bear very high costs but our yield is higher than in previous years and higher than the average of other airlines.”

However, THAI customers may think otherwise, as the new ticket prices have been found to be higher by Bt768 on short economy seat flights (Yangon, Penang, Vientiane, Hanoi and Phnom Penh), while business passengers will have to cough up an additional Bt1,152 and first-class passengers Bt1,280.

The hike is even more on longer flights – Bt2,112 to Bt3,712 for (economy – first class) flights to and from New Delhi, Karachi, Dubai, Shanghai and Beijing.

Travellers to Japan will have to pay an additional Bt2,560 to Bt4,800 while the load on London passengers will be even higher at Bt9,280 to Bt12,800.

Meanwhile, THAI and Rolls-Royce have declared open the world’s first research and development project for Trent XWB jet engines. The event was presided over by Transport Minister Arkhom Termpittayapaisith.

The two-year project is targeted at further testing the Trent XWB-97 engine that was first used in the Airbus A350-1000 in February this year.

“This will enable Rolls-Royce to find the strengths and weaknesses of this engine throughout its life span,” said Surachai Piencharoensak, THAI executive vice president, Technical Department.

THAI’s Technical Department is the first to join hands with Rolls-Royce to participate in Trent XWB engine development with real flight simulation at THAI’s Technical Department. Engine testing is conducted regularly at the test cell in order to improve engine efficiency, to comprehend various limitations to engine usage, product development and inspection plans, and for quality technical maintenance. This marks the first-ever cooperation of its kind that Rolls-Royce has forged with any customer.

Dominic Horwood, Rolls-Royce chief customer officer for civil aerospace, said the collaboration would allow Rolls-Royce to carry out full-scale operations in Thailand ranging from production, maintenance, repair and overhaul, and research and development. He said the company invests US$100 million (Bt3.3 billion) in Thailand annually in order to support its production line.

In 2020, both companies will also co-develop technological capability for maintaining the Trent 700 jet engine to the overhaul level, giving THAI the status of authorised maintenance centre for these engines.

 

Most view