Premium economy: Thai Airways considers joining the growing trend


Thai Airways is evaluating the introduction of a premium economy product, which over the last few years has become more mainstream in the Southeast Asian market and globally. There are now over 12 full service airlines in Asia Pacific and over 20 FSCs globally offering premium economy.

Three Southeast Asian flag carriers have introduced premium economy over the past three years - Philippine Airlines (PAL), Singapore Airlines (SIA) and Vietnam Airlines. The Vietnam Airlines and PAL examples indicate there is a potential niche for premium economy in leisure markets. Thailand is primarily an inbound leisure market, although premium economy would help Thai Airways compete for sixth freedom corporate traffic.

Thai Airways is considering including a premium economy cabin on new widebody aircraft that it will soon order for delivery from late 2019 or 2020. Thai Airways is also considering fitting a premium economy cabin in the upcoming retrofit of its 777-200ER fleet.

  • Thai Airways is considering introducing a premium economy product on a segment of its long-haul fleet.
  • Three Southeast Asian flag carriers - Philippine Airlines, Singapore Airlines, and Vietnam Airlines - have already introduced premium economy over the past three years.
  • Thai Airways is evaluating the inclusion of premium economy cabins on new widebody aircraft it plans to order for delivery from late 2019 or 2020.
  • The growing popularity of premium economy in the Asian market will be discussed at the CAPA Asia Aviation & Corporate Travel Summit.
  • Southeast Asian full-service carriers will have over 100 aircraft fitted with premium economy by the end of 2018.
  • Thai Airways is the largest Southeast Asian full-service carrier without a premium economy product, and its introduction could help it compete for leisure and corporate traffic.


The growing popularity of premium economy in the Asian market will be a subject of panel discussion at the CAPA Asia Aviation & Corporate Travel Summit on 9-Nov-2018. Click here for more details on the summit.

Premium economy gains traction in Southeast Asia

Three Southeast Asian flag carriers currently offer premium economy, compared to zero three years ago. Vietnam Airlines introduced premium economy in Jul-2015, followed by SIA in Aug-2015 and PAL in Jun-2017.

SIA currently has 63 aircraft fitted with a premium economy cabin and will have 74 aircraft with premium economy by the end of 2018. SIA now offers premium economy on all but two of its long haul routes (one of which will be upgraded to an aircraft with premium economy in early 2019) and on some of its regional routes.

See related report: SIA's premium economy attractive for corporate travel

Vietnam Airlines has 20 aircraft fitted with premium economy and will have 22 aircraft with the product by the end of 2018. It now offers a premium economy product to all six of its long haul destinations (Frankfurt, London, Melbourne, Moscow, Paris and Sydney) and on some regional flights within Asia.

PAL has nine aircraft fitted with premium economy and will have 12 aircraft with the product by the end of 2018. It currently offers premium economy to four long haul destinations (Auckland, Honolulu, Melbourne and Sydney) and on some regional flights. PAL will be introducing premium economy on two longer routes - Manila to London and New York - in 4Q2018.

Southeast Asian premium economy fleet to reach 108 aircraft at the end of 2018

All the premium economy aircraft at Vietnam Airlines were delivered with that seating configuration. The airline has used the rapid renewal of its entire widebody fleet to introduce premium economy, having included premium economy on all 12 of the A350s it has received over the past three years and on most (but not all) of the 11 787s it has taken during this same period.

Around 60% of the SIA premium economy in the fleet was retrofitted and 40% was delivered new. SIA has premium economy on three aircraft types - A350-900s, A380s and 777-300ERs.

PAL retrofitted eight A330-300s with premium economy from 2Q2017 to 1Q2018. PAL's first new aircraft with premium economy, an A350-900, was delivered on 14-Jul-2018. PAL will take three more A350-900s by the end of 2018 and two more A350s in 2019.

Southeast Asian FSC premium economy fleet: end 2018

Airline Number of premium economy aircraft

Premium economy

seats in fleet

Singapore Airlines 74 2,642
Vietnam Airlines 22 820
Philippine Airlines 12 288
TOTAL 108 3,750

Premium economy fleet expansion in SE Asia to slow in 2019

The two additional A350s for PAL are the only Southeast Asia-based premium economy aircraft currently slated to be added in 2019.

PAL (at least for now) has no plans to retrofit its 777-300ER fleet with premium economy, which would enable the airline to offer a more consistent product across its long haul network.

SIA will essentially complete the roll-out of premium economy in 2H2018 with the delivery of seven A350-900ULRs and the retrofit of the final batch of 777-300ERs. Future 777-9Xs will have premium economy but these will mainly replace premium economy 777-300ERs. The only remaining long haul aircraft in the SIA fleet that does not have premium economy, the 777-200ER, is being phased out over the next year or two.

Vietnam Airlines has not opted to include premium economy in 787-10s, which will be delivered from 2019, as these aircraft will be used on regional routes within Asia Pacific. Vietnam Airlines will continue to focus premium economy on its 787-9 and A350-900 fleets, which are mainly used on long haul routes. The airline has no more 787-9s on order and will take its last two A350-900s by the end of this year.

Thai Airways is the largest SE Asian FSC without premium economy

However, the premium economy fleet in Southeast Asia could potentially grow by more than two aircraft in 2019 if Thai Airways decides to add a premium economy product.

Thai Airways is the second largest Southeast Asian full service airline, based on international seat capacity. It also has the second largest widebody fleet among all Southeast Asian airlines. Given its status as Southeast Asia's second largest FSC, Thai Airways is naturally looking at adding premium economy to stay competitive.

SIA is the largest international FSC based in Southeast Asia. Vietnam Airlines and PAL are also in the top five (based on international seat capacity), along with Malaysia Airlines. Malaysia Airlines examined the addition of premium economy to its widebody fleet in 2016 as part of its restructuring, but ultimately decided against adding the product.

Top five Southeast Asian FSCs based on weekly international seat capacity: week commencing 16-Jul-2018

Rank Airline Weekly seats Number of widebody passenger aircraft
1 Singapore Airlines 464,572 112
2 Thai Airways 412,150 83
3 Malaysia Airlines 223,156 32
4 Vietnam Airlines 215,848 25
5 Philippine Airlines 193,082 29

Thai Airways could introduce premium economy on new widebody aircraft

Thai Airways VP for alliances and commercial Krittaphon Chantalitanon told CAPA last month that the airline was again studying premium economy. "At the moment we are thinking if we should seriously go for premium economy", he said.

Thai Airways offered premium economy as a niche product on its A340-500 fleet from 2005 to 2015. The A340-500 was initially used for nonstop flights from Bangkok to Los Angeles and New York - and following the suspension of New York and later Los Angeles was used on select routes to Europe. SIA similarly had premium economy as a niche product on nonstop US routes from 2004 to 2008, when SIA's (now retired) A340-500 fleet was retrofitted to an all-business class configuration.

Thai Airways also briefly experimented in the early 2000s with a premium economy product on regional flights, using its A300 fleet.

The current study involves including premium economy on the new Airbus and Boeing widebody aircraft that Thai Airways plans to order this year. Thai Airways is now assessing product options - economy, premium economy, business and first - for its future widebody fleet.

Thai Airways does not currently have any aircraft on order but is in the process of securing board and government approval for around 20 aircraft. The airline was initially aiming to place orders in 1H2018, but the project has been delayed for several reasons including management changes.

See related report: Thai Airways: first new order in six years to provide overdue replacements for 747-400s, older 777s

Thai Airways is now aiming to place orders in 2H2018 and is hoping for delivery slots starting in 4Q2019. However, it may not be able to secure any delivery slots until 2020, which could force it to delay the planned retirement of its 747-400 fleet.

Thai Airways has a diverse fleet with various inflight products

Thai Airways currently operates 10 747-400s, which along with its six A380s are the only aircraft in its fleet with first class. The rest of its fleet consists of two class aircraft with economy and business class.

Thai Airways has lie-flat business class seats on its A380s, A350s, 787s and 777-300ERs, whereas its older model 777s and most of its A330s have angled flat business class seats. The 747-400s have recliner style business class seats but lie-flat seats are provided in first class.

Thai Airways fleet summary: as of 17-Jul-2018

Aircraft In service On order
Airbus A330-300E 15 0
Airbus A350-900XWB 12 0
Airbus A380-800 6 0
Boeing 737-400 2 0
Boeing 747-400 10 0
Boeing 777-200 6 0
Boeing 777-200ER 6 0
Boeing 777-300 6 0
Boeing 777-300ER 14 0
Boeing 787-8 6 0
Boeing 787-9 2 0
Total: 85 0

Thai Airways retrofits some A330s and all 777-200ERs

Thai is in the process of retrofitting five of its A330-300s with lie-flat business class seats. The first aircraft was recently completed. These aircraft, which had to be retrofitted due to issues with the original seat supplier, are being viewed as a trial of a potential new regional business class product.

There are no plans to offer premium economy on the A330 fleet. However, Thai Airways is considering the inclusion of premium economy in a new retrofit project involving its 777-200ER fleet.

Thai Airways was initially planning to retrofit its six 777-200ERs in 2018 with a new lie-flat business class seat. The project has been delayed until 2019, and this has given Thai Airways the opportunity to expand the scope to include premium economy, potentially.

If Thai Airways decides to introduce a premium economy product, the new class of service may debut on six 777-200ERs before the new batch of around 20 widebodies (likely to consist of a mix of 787s, 777-300ERs and A350s) are delivered.

For now, Thai Airways has no plans to retrofit its 777-300ERs or any other of its long haul aircraft. However, it will obviously need to consider installing premium economy on at least some of its existing 777-300ERs, 787s, A350s and A380s, should it go for premium economy.

Thai Airways has several competitors with premium economy

Thailand is mainly a leisure market, making premium economy a less obvious business case than for Singapore. However, the Philippines and Vietnam are also mainly leisure markets.

Thai Airways is also a much larger sixth freedom competitor than PAL or Vietnam Airlines, which rely mainly on local traffic. In markets such as Australia-Europe, Thai Airways competes with SIA and other Asia-based hub airlines that offer premium economy.

There are currently nine other Asia Pacific full service airlines (for a total of 12) that offer premium economy - Air New Zealand, All Nippon Airways, Cathay Pacific, China Airlines, China Southern, EVA Air, Japan Airlines, Qantas and Virgin Australia. All nine of these airlines have had premium economy for much longer than their main three Southeast Asian competitors.

China Airlines is the latest North Asian airline to introduce premium economy, in 2014. Cathay Pacific introduced premium economy in 2012.

There are large differences in product, but all the airlines in this list provide a separate premium economy seat. Airlines that offer an extra legroom product using regular economy seats are excluded.

Asia Pacific FSCs with premium economy products: as of Jul-2018

LCCs are also excluded from the table above. AirAsia X, Indonesia AirAsia X, Jetstar, Jin Air, NokScoot, Scoot, Thai AirAsia X and Thai Lion Air all offer a premium product in their widebody fleets; some of these are similar to premium economy seats and some are more like business class seats.

Emirates' premium economy decision could help sway Thai Airways

There are also now several European and North American FSCs offering premium economy products. Five of these European airlines serve Bangkok - Aeroflot, Air France, British Airways, Lufthansa and SAS.

Europe is an important market for Thai Airways, and offering a premium economy product could help it compete for Thailand-Europe traffic. In addition to the five European premium economy competitors, EVA serves the Bangkok-Europe market using fifth freedom rights and premium economy-configured aircraft. Thai Airways accounts for approximately 50% of Thailand-Europe seat capacity; airlines offering premium economy products account for around half of the remaining 50%.

Gulf airlines are also very strong competitors in the Thailand-Europe market. Emirates' recent decision to introduce premium on its A380 fleet from 2020 could further persuade Thai Airways to start offering the product.

Emirates is the largest foreign airline at Thai's hub airport, Bangkok Suvarnabhumi, operating six daily flights on the Bangkok-Dubai route, and also competes against Thai Airways on the Bangkok-Hong Kong and Bangkok-Sydney routes. Seven of Emirates' eight daily Bangkok flights are currently operated with A380s.

Thai Airways will likely not offer as many premium economy seats or routes as SIA. However, the airline could decide to offer a small premium economy cabin on selected routes, enabling it to compete more effectively for premium leisure traffic from Europe and for sixth freedom corporate traffic. Some outbound demand is also likely as the middle class population and discretionary income levels in Thailand grow.

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