Chiang Mai International Airport

Thai Airways unit Thai Smile seeks to prove itself as a new type of carrier for Asia

While Thai Airways' new unit Thai Smile is now settling in to its second week of operations, the carrier remains in the vanguard and is seeking to prove its hybrid model as suitable for the Asian market. Thai Smile has undergone many revisions since being established just over a year ago and continues to, with the carrier now planning to split future capacity evenly between the domestic and international markets rather than have a majority of international capacity.

Thai Smile launched services on 7-Jul-2012 with an international route to Macau but in Aug-2012 will launch domestic services. So far besides Macau only five domestic routes have been announced but more international routes will come as part of a later phase, including possibly from second-tier Thai cities, breaking Thai Airways' focus on Bangkok and, to a lesser extent, Phuket. But the new unit's higher cost base than a LCC will ultimately limit its growth potential.

Thai Airways delays launch of Thai Tiger Airways again; Thai AirAsia preparing strategies to compete

Thai Airways has had a number of challenges in its plans to establish new LCC start-up, Thai Tiger Airways, under a JV with Singapore’s Tiger Airways. In its latest set back, the carrier has been forced to postpone the launch date of the LCC from Mar-2011 to late May-2011. However, the setbacks have not comforted competitors, with Thai AirAsia stating it is developing strategies to effectively compete with the new LCC.

Thailand’s secondary gateways holding up better than Bangkok

Airports of Thailand (AoT), operator of the country’s major international airports, reported a 6.3% year-on-year reduction in passenger numbers in Jul-2009, but passenger numbers had already started falling in the same month last year (by 1.3%), meaning the decreases are now compounding.