Thai Smile strategy tweaked again as new hybrid continues to move upmarket

Thai Airways has again adjusted the strategy of its new hybrid unit Thai Smile as the group struggles to determine the ultimate product mix and network. The latest changes include a dedicated business class cabin, which will be introduced in 2013 following delivery of Thai Smile's seventh A320, and plans to convert the unit into a full subsidiary. Thai Smile also continues to tweak its network, dropping earlier plans to launch services from Bangkok to Hyderabad and Phuket to Singapore.

As Thai Smile represents an experiment for Thai Airways and the overall Asian market, it is not surprising to see almost continual changes to the operation. But all the changes reflect flaws in Thai Smile's initial business model, which falls between low-cost and full-service. Thai Smile will likely evolve from a hybrid into more of a pure full-service regional subsidiary similar to Singapore Airlines' SilkAir and Cathay Pacific's Dragonair.