BANGKOK, Thailand (eTN) - Since Piyasvasti Amranand has taken
over the post of President of Thai Airways International a year
ago, things have been moving forward rapidly to improve both cash
flow and the airline's image. Thailand's national carrier is
succesfully restructuring its operations by being profitable again.
Mr. Amranand is also preparing the airline's future: service on
board is being improved to better compete with other carriers in
the region, while loads of new aircraft are due for delivery
beginning next year. Last month, Thai ordered seven Airbus
A330-300s and eight Boeing 777-300ERs atop of its previous aircraft
orders.
Thai now wants to reconquest its traveling public both
domestically and regionally. Thai has been suffering over the last
seven years from increasing competition from low-cost carriers in
the Thai market. Today, budget carriers' market share in Thailand
has reached 22 percent, with further growth for this segment being
forecast. Thai Airways' ripost to low-cost carrier competition
arrived in 2004 with the launch of Nok Air, a carrier flying
domestic routes. "However, Nok Air's growth does not fit anymore
with our strategy. We made clear that we want to go regionally on
the low-cost market. We have not been able to increase our
ownership into Nok Air capital [currently at 39 percent]. And as
Nok Air's growth is too slow, we looked for another alternative,"
explained Mr. Amranand.
Thai Airways and Nok Air relations have never been easy since
the low-cost airline's inception. And the fact that Thai Airways
decided to seize a new initiative in the low-cost market shows how
high the unsatisfaction is with Nok Air. Although Nok Air will
continue to serve domestic destinations not flown by Thai Airways,
it looks like Thai is turning its back on its subsidiary to
concentrate on its newest venture.
This is how Singapore-based Tiger Airways - one of the most
successful budget carriers in Southeast Asia - sensed an
opportunity emerging in Thailand. Tiger Airways Holdings Ltd.
started its operation in September 2004 and has today a fleet of 19
airbus A320 operating to 37 destinations in 11 countries. "We are
very low-cost disciplined and focused. We now transport 5 million
passengers a year and are taking advantage of the skies'
liberalization in Southeast Asia and the huge potential on the
continent," explained Tiger Airways CEO, Tony Davis.
On August 2, Thai Airways signed a Memorandum of Understanding
with Singapore-based, low-cost carrier Tiger Airways to create a
new low-cost airline. Thai Tiger Airways is due to start its
operations by early 2011 out of Bangkok Suvarnabhumi International
Airport. Thai and Thai Airways funds will own 51 percent of the
joint venture, while Tiger Airways will hold the remaining 49
percent. "We believe in Tiger['s] good knowledge of the low-cost
market," said Piyasvasti Amranand. Tiger Airways CEO Tony Davis
shared the airlines excitement about moving into Thailand:
"Thailand has one of the best growth potential in Asia for tourism.
We are ourselves growing sequentially. We turned profitable after
three years in Singapore; we made a profit after 18 months in
Australia. We will concentrate on our new Thai venture to be sure
to make it profitable."
Neither Thai or Tiger unveiled how Thai Tiger will look from day
one. The only revelation is that the carrier will start with a
fleet of 5 Airbus A320. No destinations have been announced, while
recruitement is due to start soon, with the promise that Thai Tiger
Airways will be fully independant in its management's decision - a
requisite in Thailand.
Source : http://www.eturbonews.com/17620/thai-airways-goes-along-tiger-airways-launch-no-frill-carrier