THAI starting "super deluxe" airline service

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26-03-03

 

THAI starting "super deluxe" airline service

 

Plans added push for flights to Europe

 

With plans to set up no-frills airlines commonplace in the commercial aviation world these days, Thai Airways International (THAI) may take a different tack by establishing a ``super deluxe'' carrier.

 

THAI president Kanok Abhiradee floated the idea at a gathering of the Thailand Chapter of the Asia-Pacific Aviation Media Association Monday night, as the national airline is also examining the feasibility of setting up a budget airline under its umbrella.

 

He said the premium service would cater to the growing wealth of passengers in neighbouring countries, such as China and India.

 

Mr Kanok did not define ``super deluxe'', but airline insiders suggested it might represent a personal view that had not been formally discussed.

 

During difficult times, some unconventional approaches might need to be taken to turn the situation around, he said.

 

THAI was also looking at stepping up advertising spending and promotion on its normally lucrative European sector, he said.

 

Most airlines around the world are cutting back on flights, laying off staff and slashing costs to make ends meet amid the downturn in the commercial aviation industry brought on by the war in Iraq.

 

For THAI, the Bangkok-Europe service has been the hardest hit, as many jittery Europeans refrain from travelling to the Far East, not only because of the military action in Iraq, but also the fear of Asian flu.

 

``Bookings have been soft from Europe. We have experienced some drop in some destinations by between 7% to 10%,'' said Mr Kanok.

 

He also said traffic on routes to China, Hong Kong, Singapore and Vietnam was currently affected by the mysterious pneumonia-like illness that had recently hit the region.

 

``From the passengers' point of view, the virus scare, the biological effect scare, probably will cause a much more negative impact [than the Iraq war] for an airline like Thai Airways,'' he said.

 

The outbreak of Severe Acute Respiratory Syndrome (Sars) has killed at least 17 people in Hong Kong, Vietnam and Canada, and five deaths from an earlier outbreak in China also are suspected to be linked.

 

Mr Kanok predicted that THAI and domestic tourism would rebound quickly once the war ends, as they did after the Sept 11, 2001 events _ when it took just four months for the Thai carrier to recover in terms of passenger traffic. Many other carriers took much longer, he said.

 

The war in Iraq has had consequences for airlines, such as war insurance surcharges, higher fuel prices, and changing travel patterns, forcing airlines to resort to more stringent cost-cutting and a sustainable use of resources, he told the gathering.

 

Meanwhile, Mr Kanok indicated that the airline expected to go ahead with its long-delayed share offering once the war is over, despite the difficult outlook for the aviation industry.

 

The carrier was ready to float shares as planned and will do so ``any time after the Iraq war'', he said.

 

The offering, first planned a decade ago and repeatedly postponed over the past few years due to negative market conditions and management changes, would reduce the government's holding in the airline to 70% from 93% currently.

 

Mr Kanok reaffirmed that the eventual target was to reduce the government's holding to 50% but the idea of selling a major stake to a strategic partner had been abandoned.

 

He expected that the fast recovery from the current fall in passenger traffic would make the share offering possible.

 

Source: The Nation