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Based at Bangkok’s Suvarnabhumi Airport with secondary hubs in Phuket and Chiang Mai, Thai Airways is the national airline of Thailand and majority-owned by the Thai Ministry of Finance. Using a fleet of narrow and wide-body Airbus, Boeing and ATR aircraft, Thai Airways operates an extensive network of domestic and regional services throughout Thailand and Asia and international services to Europe, North America, Australia and New Zealand. Thai Airways is a founding member of Star Alliance.
Location of Thai Airways main hub (Bangkok Suvarnabhumi International)
Thai Airways share price
1,182 total articles
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Bangkok Airways is an oddity – a successful independent full-service short-haul carrier that has been able to grow despite competing in a market dominated by LCCs and large aligned flag carriers. Bangkok Airways now seeks another oddity – an initial public offering in a market that in recent years has only seen LCCs and occasional flag carriers go public. The remainder of 2013 will see four Southeast Asian carriers attempt IPOs: three LCCs in AirAsia X, Indonesia AirAsia and Nok Air; and low-profile Bangkok Airways.
If successful with its upcoming listing on the Stock Exchange of Thailand, Bangkok Airways will have the cash to accelerate network and fleet expansion. The carrier, which currently operates 23 aircraft, is well positioned to expand despite facing intensifying competition in most of its markets.
Bangkok Airways’ biggest strength is a wide and growing portfolio of partnerships, which gives it access to high-yield passengers. Several of its partners are growing rapidly at the carrier’s main hub, Bangkok Suvarnabhumi, and need more regional feed.
There are 103 A380s in service as of early May-2013. Emirates has 33 and Singapore Airlines has 19, so when assessing network scheduling, these two and their hubs predominate: of the 1,048 weekly A380 flights, 402 are from Emirates alone. Dubai and Singapore airport see the most A380 flights.
But there are some less predictable statistics. The airport to see the most A380 operators is Hong Kong followed by Paris and Los Angeles. The largest A380 destination that is not (yet) an A380-hub is London Heathrow. The UK and USA are the most common A380 destinations after Australia, Singapore and the UAE. Asia, not the Middle East, sees the most A380 flights; South America sees none. Guangzhou-Shanghai Pudong is the shortest A380 route at 1,202km while Los Angeles-Melbourne is the longest at 12,751km. Qantas and Lufthansa have the highest average sector length while Thai Airways is placing the most number of cycles – about two – on its aircraft per day. Qantas and Air France are placing the least (just over one).
AirAsia X is close to finalising plans for establishing an affiliate in Thailand, a fast-growing market with favourable conditions for long-haul low-cost operations. The new joint venture project between AirAsia X and Thai partners, which will almost certainly include sister short-haul carrier Thai AirAsia, will put further pressure on the Thai Airways Group.
Thai Airways has already been struggling to fend off increasing LCC competition in the domestic and regional international market, which it has responded to by increasing its involvement in short-haul LCC affiliate Nok Air and launching new hybrid carrier Thai Smile. AirAsia X will bring new LCC competition to some of Thai’s strongest medium-haul markets, particularly Australia, Korea and Japan.
Thai Airways has been studying potential long-haul low-cost options and the launch of an AirAsia X affiliate in Thailand, which will likely commence services within the next year, adds urgency. Thai Airways has already been slightly impacted by Asia’s two other long-haul LCCs, Jetstar and Scoot, but having to compete with a local long-haul LCC represents a much bigger challenge.
In this third and final part on the growth of Taiwan’s TransAsia, the carrier sees great potential for cross-Strait traffic once restrictions are loosened: governments have opened more cities that can be linked, but these are smaller and difficult to maintain a sustainable service. Even if greater access at primary cities were offered, obtaining slots is a challenge.
Once ETOPS is secured around 2015, this may pave the way for TransAsia’s A330s to launch intercontinental services, but before then the carrier is considering how it can grow outside its Taipei hub by using liberal traffic rights in Macau, Japan or Thailand, possibly in conjunction with its growing branch offices. TransAsia would be open to gaining overseas scale by working with local airlines – but airlines around Asia have not shown themselves to be eager to enter into strategic partnerships.
And meanwhile the invasion of low-cost operators is quietly growing, largely under the noses of the incumbent Taiwanese airlines.
This is the second part of a report looking at the Thai Airways Group performance from 2012 and outlook for 2013. The first part looked at Thai’s mainline operation, which has been impacted by unfavourable economic conditions on long-haul routes and faces increasing competition in Asia. This part looks at Thai Smile, a new hybrid unit that the Thai Airways Group launched in Jul-2012.
2013 will be a key year for Thai Smile as the unit rapidly expands and continues to evolve its hybrid model. Thai Smile is adding five international routes over the next month, giving it a network of six international and seven domestic routes. Several more destinations, primarily international, are expected to be added in 4Q2013.
2013 will also likely see Thai Smile transition from being a unit of Thai Airways to a 100%-owned subsidiary. Thai Smile was launched as a unit because using the Thai Airways operators’ certificate (AOC) was seen as a quicker and cheaper solution. But Thai’s board is expected to soon approve a proposal to convert Thai Smile into a subsidiary, which would see it apply for its own AOC.
Thai Airways has returned to the black, posting a small profit for 2012 despite challenging conditions on its long-haul routes. The airline group plans to again focus growth in 2013 on short and medium-haul routes within Asia, where market conditions are generally more favourable. The group now includes three brands, including LCC affiliate Nok and regional hybrid unit Thai Smile – both of which are entirely focused on the fast-expanding Asian market.
But Thai Airways is also now facing challenges on routes within Asia as competition intensifies. Thai AirAsia is pursuing rapid expansion, putting pressure on Thai. Rapid growth at Nok and Thai Smile will help the Thai Airways Group compete against LCCs but Thai Airways will need to reduce costs and make adjustments in order to achieve sustainable profits.
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