THAI boss seeks anti-AirAsia alliance

Business » Economics

THAI boss seeks anti-AirAsia alliance

Piyasvasti calls for unity on foreign threat

Published: 28/11/2009 at 12:00 AM
Newspaper section: Business

Thai Airways International (THAI)'s chief executive says Thai-owned carriers should form a united front against foreign rivals, especially the fledging budget carrier AirAsia, whose rapid expansion is seen as a "threat".

"Instead of fighting among ourselves, it would be better for us, Thai airlines, to stick together, co-operate and fight AirAsia, which is the biggest threat," said Piyasvasti Amranand.

"They [AirAsia] are expanding rapidly, taking a lot of passengers away. Their Thai market share has been increasing rapidly."

In his sixth week as president of the flag carrier, the former energy minister said he was advocating "much closer co-operation" among Thai airlines such as privately owned Bangkok Airways.

The co-operation could take several forms, including a code-share agreement, feeding passengers between airlines, consolidating networks and avoiding "unnecessary" competition, he said.

But Dr Piyasvasti's view, that AirAsia is a common threat to Thai airlines, surprised Tassapon Bijleveld, chief executive of Thai AirAsia, the sister carrier of Southeast Asia's largest low-cost carrier group based in Malaysia.

"Why are they seeing us in that light? They should see us complementing them, by bringing passengers from Asean into Thailand and feeding them to Thai airlines and THAI through its Bangkok hub," he told the Bangkok Post.

Mr Tassapon added that AirAsia and THAI served different markets, with the former targeting budget-conscious travellers and the latter those seeking full services. "It is fair to say that THAI should be competing with legacy carriers such as Singapore Airlines, Cathay Pacific and Emirates, not us," he said.

Mr Tassapon asked why entities with foreign ownership, like Thai AirAsia - which is 49% owned by Malaysia's AirAsia Bhd - face discrimination.

"Do we believe in free trade and fair competition in this country?"

AirAsia's extraordinary growth has raised considerable concern among airlines, at least in Southeast Asia.

Marketed under the slogan "Now Everyone can Fly", AirAsia has now flown more than 75 million passengers and is linking cities across Asia-Pacific.

In just seven years, the airline has grown from a fleet of two aircraft with one destination and a staff of 250 to a fleet of more than 80 aircraft with 113 routes to almost 60 destinations across Asia-Pacific and a staff of 6,500.

The airline's low-cost long-haul affiliate, known as AirAsia X, also flies from its Kuala Lumpur hub to Australia, northern China, Taiwan, the UK and, most recently, the United Arab Emirates.

THAI, which will celebrate its 50th anniversary next year, has a fleet of 88 aircraft, which transports nearly 20 million passengers a year to 74 destinations, and employs 26,000 workers.

Industry sources said Dr Piyasvasti brought the issue of co-operation among Thai airlines to the public following a recent meeting with Bangkok Airways president Puttipong Prasarttong-Osoth, in which co-operation between the two carriers was discussed, without concrete agreement on the matter being reached.

Relate Search: Thai Airways International, AirAsia, Puttipong Prasarttong-Osoth

About the author

: Writer: Boonsong Kositchotethana; Position: Deputy Editor Business

Keep this article in your social bookmark:

Latest stories in this category:

Share your thoughts

For more candid, lengthy, conversational and open discussion between one another, use our Forum

Report objectionable comments click here. Include: discussion #, commenter name, comment date / time as it looks on the page. Example: discussion 15: 09/01/2009 at 10:00 AM.

Plamerg Baakam

Discussion 11 : 29/12/2009 at 05:45 PM11
Dont be fool by Budget Airlines like Air Asia. I fly Thai Air KL-BKK sector for almost 3 years now. At one point I was quite mad at a counter staff service at Suvarnabhumi for being quite rude and decide to fly Air Asia (which I did for a while). I thought the fare was a lot cheaper than Thai, but after evaluating carefully, it is not really that much cheaper. During festive times, Air Asia can be more expensive than Thai, but this is a budget airlines flying A320. Thai flies 777 or A300, A330, A340 - with meals. I now fly only Thai or MAS. Only fly Air Asia if I really really have to.
Jill

Discussion 10 : 01/12/2009 at 10:08 PM10
Understand that AirAisia really took some market share from THAI due to the lower prices and it's really a competition between full-frilled and low-cost. However, I wonder why I didn't see any of NokAir in the article. NokAir is actually a THAI's weapon for low-cost market. If THAI really seeks for national cooperation, NokAir and One-Two-Go should also be discussed with.
dtyolmn

Discussion 9 : 30/11/2009 at 06:22 PM9
This is amazing! A com-any CEO blaming others for his company's problems. He needs to stand up and do his job. Evaluate everything and then develop a plan. He should have learned this in high school. Advertise, cut prices, offer deals and rewards, give pep talks to employees, stream line services. Like the old saying goes "keep it simple, make it fun" Quit crying and do your job.
Luke

Discussion 8 : 30/11/2009 at 10:38 AM8
Can't feel the heat get out the way let the better service do their job and show you how it work. Secondly, you should learn from a small company and you might learn from it.
Magician

Discussion 7 : 30/11/2009 at 07:58 AM7
This is a good time to punish those full-frilled airlines for over-charging the passengers.

However, having traveling with budget airlines for a while, I am quite sick of their service as well.

Therefore, I am glad to share with the rest that... with the introduction of budget airlines, those biggies like SQ, Thai and Cathay start to realise that their market shares have been reducing, cutting down the ticket price will be the main strategy to attract customers. While in the same time, budget airlines (well not so budget sometime) promise to offer lower ticket price... which in return is a win-win situation for passengers...
rfukata

Discussion 6 : 29/11/2009 at 02:55 PM6
I just can't understand the position of the new CEO of Thai-airways.?
first he mentions of a bold strategy to streamline Thai air with early retirements, improve inflight services, synergise on code shares with other
global carriers for better recognition... and now what the he_ll is he talking
about?
"(THAI)'s chief executive says Thai-owned carriers should form a united front against foreign rivals, especially the fledging budget carrier AirAsia, whose rapid expansion is seen as a "threat"."

Does a real CEO' business professional express these words? This guy doesn't deserve to stay on the board....he should have had a well planned
market strategy inplace to deal with AAsia and other competition.
By the way, where and how did Thai-airways ever put this hopeless guy in this kind of position?
Michael

Discussion 5 : 29/11/2009 at 08:49 AM5
It is a shame to blame Air Asia for taking away your Thai Airway business. As mentioned, Thai Airway with 50 years of experiences and your are blaming Air Asia with only 8. That’s obviously showing that Thai Airway staff are sleeping and not doing anything to improving for Thai Airway the last many years.
frequentflier

Discussion 4 : 29/11/2009 at 02:59 AM4
The Head of THAI would do well to start by dispelling the myth that Air Asia is a low cost carrier. For the second month running my trip to KL from Chiang Mai, using a combination of THAI and Lufthansa is a lot cheaper than Air Asia nonstop from CNX. The fact that I have to overnight in Bangkok on the return journey is offset by the fact that I would have had a hotel bill anyway and I no longer have to catch a bus at 0430 to get to the LCCT to check in for an 0720 departure back to CNX. A quick look at AA's website shows that their flights to Chiang Mai from BKK for the coming holiday period are no lower than THAIs. Bangkok Airways is totally sold out. Shop around.

As a consumer, I want THAI to compete with everyone, including Thai Air Asia. The latter's service is erratic at best, often late and I dont want to be compensated with a voucher to obtain a piece of AA merchandise. It is rather arrogant to say that THAI should just be competing with the likes of Cathay or Emirates. Why? There is no benefit for connecting passengers to fly Thai Air Asia domestically as they have no arrangements with other carriers to transit BKK. You are therefore inconvenienced by having to travel as a domestic passengers and check in again and clear immigration in BKK. Of course at Chiang Mai immigation, there are virtually never any lines.
jack

Discussion 3 : 29/11/2009 at 02:59 AM3
A lot of companies are gonna feel threatened by Airasia because they are more successful, but customers will be loyal to Airasia and any attempts at containing Airasia will backfire with customers because Airasia delivers.
Patrick

Discussion 2 : 28/11/2009 at 04:32 PM2
THAI is a dinosaur who don't change with time. Look as Malaysian Airlines, they are now fighting tooth and nail with AirAsia offering lowest possible fare with full service offering. How that's for compeitition. While THAI wean and cry foul at AirAsia for taking away their business> Shame on you, THAI after 50 years you still has a lot to learn the rope of airline business from
AirAsia.