Thai Airways

Myanmar set to become Asia’s next big aviation growth market

Myanmar’s aviation market is poised to enter a major period of growth as the country begins to open up following landmark elections earlier this month that were won by Aung San Suu Kyi’s National League for Democracy. The election was seen as a turning point for Myanmar, formerly known as Burma, and the start of a more favourable business environment, including for aviation. Several Asian carriers and airport operators have identified near-term opportunities in Myanmar. The opportunities for all types of carriers – local and foreign, domestic and international, low-cost and full service – face no limitations in the medium term as the Myanmar market is now the most underserved market in ASEAN and perhaps all of Asia.

Myanmar’s two existing international airports, at Rangoon and Mandalay, are to be partially privatised while a recently opened new airport at the new capital of Naypyitaw will soon start to handle international flights. There are also plans for upgrading several domestic airports, many of which lack basic infrastructure.

MAS adjusts short-haul strategy again as plans for separate premium brand are dropped

Malaysia Airlines (MAS) has dropped plans to establish a new short-haul premium brand, which was slated to take over the carrier’s regional routes and had been a major component of its new business plan. The ongoing restructuring at MAS, which is aimed at restoring profitability at the flag carrier by next year, will now focus primarily on the long-haul operation. By and large it will be business as usual for the flag carrier’s short-haul operation although it will still be separated out as a new division. As part of this separation, MAS will stop entirely the use of widebodies on short-haul routes, which is a common practice in Asia where regional routes are often thick enough to support large aircraft that otherwise sit idle between long-haul flights.

The reversal of last year’s decision to establish a new company and brand for the full-service short-haul sector, under what MAS had called Project Sapphire, raises some questions about the long-term viability of the group’s short-haul operation. But rapid renewal of the MAS narrowbody fleet, network adjustments and anticipated coordination with AirAsia could still lead to the financial improvements required for the new short-haul division to become profitable.

Thai Smile settles on unique hybrid model with premium economy and mixed network

New Thai Airways unit Thai Smile is gearing up to launch services on 07-Jul-2012 following a unique hybrid model aimed at allowing it to compete against LCCs at the back while meeting the needs of premium passengers, including those connecting from Thai-operated flights, with a light premium economy type of product at the front. Thai Smile’s initial network will feature a mix of new destinations for the Thai Airways Group and existing destinations, where the new carrier will look to supplement existing Thai Airways-operated service.

Thai Smile’s first destination, Macau, will be international but managing director Woranate Laprabang tells CAPA that about 30% of the new carrier’s capacity will be allocated to domestic routes. Mr Laprabang now expects to be managing a 20-aircraft all-narrowbody operation by the end of 2015.

Thai AirAsia aims to accelerate expansion following late March IPO

Thai AirAsia aims to complete an initial public offering (IPO) by the end of next month that should raise capital to help fund the next phase of its expansion programme. The Bangkok-based low-cost carrier is an affiliate of the AirAsia Group and expects to expand its fleet of Airbus A320s to 40 aircraft within five years, at which point it may look at adding widebody aircraft.

Thai AirAsia CEO Tassapon Bijleveld told CAPA at last week’s Low Cost Airlines World Asia Pacific conference in Singapore that the company is “about to file” with the Stock Exchange of Thailand its long-planned IPO. He says the filing, which would be submitted “very soon”, will lead to a 45-day quiet period which would culminate in the sale of shares. Mr Tassapon expects the IPO will be completed by the end of 1Q2012, which would require a filing in mid-February.

Thai Airways expects full post-floods recovery in January

Thai Airways International is confident of a full recovery within the next few weeks from the Bangkok floods, which caused a big drop in traffic in November and a smaller drop so far this month.

Thai Airways reported a load factor of only 61% for Nov-2011, down 11 ppts from the 72% load factor recorded in Nov-2010. Speaking to CAPA at last week’s Star Alliance event in Ethiopia, Thai Airways president Piyasvasti Amranand called the 61% figure “terrible” but says December will be “a lot better than November” although the carrier will still not be able to meet its pre-floods projection of a 75% load factor for Dec-2011. Mr Piyassvasti expects the carrier to end this month with a load factor of nearly 70%, marking a significant improvement over November but not a full recovery. “January looks better,” he adds.

Thai Tiger officially and finally dropped, pressuring Tiger to look elsewhere for growth

Thai Tiger, the proposed joint-venture between Thai Airways and the Singapore-based Tiger Airways that has been languishing for months, is finally being recognised by Tiger as over. This acknowledgement continues the pressure on Tiger Airways to find bases for aircraft it planned to deploy with Thai Tiger as well as a number of other projects that have languished as well. The impact of these non-starts is evident at Tiger Airways Singapore, which last month announced a large loss for the quarter ending 30-Sep-2011 as it failed to absorb the large capacity Tiger put in after having nowhere else to deploy it to.