Thai Airways does want to create an impression of being “smooth as silk” for the passengers as its slogan suggests, but the flag carrier of the Southeast Asian country is far from enjoying a smooth ride itself. Its core market is witnessing a continuous increase in competition employing a variety of strategies and the situation is only about to get more complicated, requiring Thai Airways to gain efficiencies wherever it can and even make some bold moves.
Thai Airways’ finances came under scrutiny again in 2011, when the airline dipped into a loss, reversing two years of profits. But the airline was heavily under external pressure in 2011, particularly due to the October and November flooding in Thailand and March earthquake and tsunami in Japan. Absent such major shocks, Thai Airways again proved its profitability in 2012, but is well aware of the challenges it is facing.
During 2012, Thai Airways dealt with the sluggish European economy and the debt crisis, which had an impact on the carrier’s performance in this important market that suffers from notoriously poor passenger yields even in the best times. Thai Airways’ chairman has also criticised the US economy, though with just one route Thai Airways is not tremendously exposed to the market. Earlier in the year, effects from late last year’s floods were still noticeable, while maintenance of the runway at its Suvarnabhumi hub experienced some disruptions in the middle of the year.
Thailand is facing a tough competitive landscape led by the growth of low-cost carriers (LCCs) and the next few months will undoubtedly further complicate the situation for incumbents. Faced with unfavourable conditions on both domestic and long-haul sectors, Thai Airways plans to utilise the strength of its brand, its Star Alliance membership and Bangkok’s geographic position to accelerate its development as a connecting hub, growing its focus further on Asian markets.
Although Thai Airways does not disclose operational figures of individual regions, its revenue sources show the growing importance of Asia. For instance, regional market on which Thai Airways is now refocusing produced revenues of THB 65.74 billion, up 12.8% from 2011 figures and a 2.7 percentage point higher year-over-year growth rate than in 2011. Domestic revenues increased by 6.4% to THB 14.69 billion as the Thai flag carrier was aided by Thai Smile. Intercontinental revenues recorded a 3.8% fall to THB 53.88 billion, which came close to 2010 levels. Load factors grew by 5.5 percentage points to 75.7% on regional services and 4.9 percentage points domestically to 77%. Intercontinental load factors grew even faster by 7 percentage points to 77.5% which improved yields and cushioned the fall in revenues.
Thai Airways does want to create an impression of being “smooth as silk” for the passengers as its slogan suggests, but the flag carrier of the Southeast Asian country is far from enjoying a smooth ride itself. Its core market is witnessing a continuous increase in competition employing a variety of strategies and the situation is only about to get more complicated, requiring Thai Airways to gain efficiencies wherever it can and even make some bold moves.
Thai Airways’ finances came under scrutiny again in 2011, when the airline dipped into a loss, reversing two years of profits. But the airline was heavily under external pressure in 2011, particularly due to the October and November flooding in Thailand and March earthquake and tsunami in Japan. Absent such major shocks, Thai Airways again proved its profitability in 2012, but is well aware of the challenges it is facing.
During 2012, Thai Airways dealt with the sluggish European economy and the debt crisis, which had an impact on the carrier’s performance in this important market that suffers from notoriously poor passenger yields even in the best times. Thai Airways’ chairman has also criticised the US economy, though with just one route Thai Airways is not tremendously exposed to the market. Earlier in the year, effects from late last year’s floods were still noticeable, while maintenance of the runway at its Suvarnabhumi hub experienced some disruptions in the middle of the year.
Thailand is facing a tough competitive landscape led by the growth of low-cost carriers (LCCs) and the next few months will undoubtedly further complicate the situation for incumbents. Faced with unfavourable conditions on both domestic and long-haul sectors, Thai Airways plans to utilise the strength of its brand, its Star Alliance membership and Bangkok’s geographic position to accelerate its development as a connecting hub, growing its focus further on Asian markets.
Although Thai Airways does not disclose operational figures of individual regions, its revenue sources show the growing importance of Asia. For instance, regional market on which Thai Airways is now refocusing produced revenues of THB 65.74 billion, up 12.8% from 2011 figures and a 2.7 percentage point higher year-over-year growth rate than in 2011. Domestic revenues increased by 6.4% to THB 14.69 billion as the Thai flag carrier was aided by Thai Smile. Intercontinental revenues recorded a 3.8% fall to THB 53.88 billion, which came close to 2010 levels. Load factors grew by 5.5 percentage points to 75.7% on regional services and 4.9 percentage points domestically to 77%. Intercontinental load factors grew even faster by 7 percentage points to 77.5% which improved yields and cushioned the fall in revenues.
การแปล กรุณารอสักครู่..
