Thai Airways International Pcl (THAI) will receive its first Airbus SAS A380 superjumbo this week, boosting efforts to compete with Singapore Airlines and Emirates for lucrative corporate travellers, Bloomberg reported on Thursday.
The six on-order A380s and new Boeing 777-300ERs will help the carrier raise the percentage of seats filled in premium cabins across its network to more than 70% from about 60%, acting president Chokchai Panyayong said in a Sept 25 interview in Bangkok. He did not give a timeframe for the goal.
Load factors in first and business class are “a little bit low,” he said. “With improvements in the product and services we can increase that.”
THAI’s 507-seat A380s and new regional unit Thai Smile will lead a push to win more business traffic as low-cost airlines lure leisure flyers. Budget airlines eventually may boost their share of regional travel to as much as 35% from 20%, Mr Chokchai said.
“The A380 is a huge plane so it will be beneficial on routes with high traffic and limited frequency,” said Nalyne Viriyasathien, an analyst at DBS Vickers Securities (Thailand) in Bangkok. “But, it can turn into a loss-maker if the company can’t fill enough seats in the low season.”
Photo by Pattanapong Hirunard
State-controlled THAI, the ninth A380 operator, will fit its aircraft with 12 first-class seats, 60 in business and 435 in coach. The new planes, which will also feature bar areas, will replace 375-seat Boeing 747-400s that have been in service for more than 20 years.
The new superjumbo will make its debut commercial flights on Oct 6, with trips to both Singapore and Hong Kong. Services to Frankfurt will start in mid-December following the introduction of a second A380. Early next year, A380s will also be added on Tokyo and Paris flights.
Thai will pay for the A380s with loans and has no plans to issue bonds or sell shares. The aircraft will let the airline add seats at congested airports, lacking slots for additional flights, said Chokchai.
“We’re expecting the A380s to serve a huge number of people,” he said. “The size is the solution for the slots.”Chokchai will move to a strategic-planning role when incoming President Sorajak Kasemsuvan arrives in October.
Malaysian Airline System also received its first superjumbo this year as it similarly tries to win more premium flyers. Singapore Air (SIA) got its 19th and final A380 earlier this month. Emirates, the largest customer for the A380, is building up a fleet of 90.
Thai is developing regional unit Thai Smile with a “premium position,” similar to Singapore Air’s SilkAir, to help win business travelers, Chokchai said. The unit, which began flights in July, will expand its fleet to 20 Airbus A320s within three years and add services to neighboring countries and southern China, he said. SilkAir ordered 54 Boeing 737s last month because of rising regional travel.
Thai Smile and SilkAir are focusing on premium markets as low-cost carriers led by AirAsia (AIRA) and Qantas Airways' Jetstar lure leisure flyers. AirAsia’s Thai venture boosted passenger numbers 20% in the second quarter to 1.9 million.
Thai is again considering entering the low-cost market after scrapping a planned venture with Singapore Air’s budget affiliate Tiger Airways (TGR). The carrier may set up a new airline or transform 49%-owned affiliate Nok Air, Mr Chokchai said.
“We think that Nok may be the solution,” he said. A final decision should be made by next month, he said.
Thai’s push into premium markets comes as an economic slowdown damps corporate and long-haul travel demand. Cathay Pacific Airways Ltd is cutting long-haul services as it retires 747 planes and because the overall market on key corporate routes including London, New York and Beijing is shrinking.