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THAI Halts Bangkok to Hat Yai Operations
20th Feb 2014
The fierce competition from low-cost airlines seems to be too much to handle for THAI as it decided to cease operations between Bangkok and Hat Yai starting March 30 this year.
The state-owned flag carrier will turn over its rights to its low-cost unit, Thai Smile, to compete with fellow budget carriers on routes where market demand is conducive to budget travel.
As a result of the cessation of THAI service on the Bangkok-Hat Yai route, Thai Smile will take over THAI's once-daily service by adding two more flights a day using the narrow-body A320 aircraft. By then, the low-cost subsidiary will have five flights a day on the Bangkok-Hat Yai route from the present thrice-daily frequency.
THAI officials admitted that the low fares and the use of smaller aircraft as well as the higher frequency offered by budget carriers are hard to match being a full-service airline.
THAI officials clarified, though, that the suspension is only temporary and could resume anytime in the future if market demand warrants it. The airline also reassured employees who are affected in the service suspension don't need to worry because they will be absorbed by its subsidiary upon the takeover.
The turnover of certain routes to its subsidiary is not a new strategy for THAI as it similarly did so since Thai Smile was established in 2012 to compete with budget carriers who eroded its revenue on several routes.
Airline officials said that they will focus more on international operations and domestic trunk routes which they deem as lucrative and sustainable enough.
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