THAI Smile Keeps a Happy Face Amidst Challenges

21st Nov 2013

Thailand has seen the influx of budget carriers wanting to grab a share of the lucrative air travel market into and within the country. Thus the competition is getting stiffer by the day as these airlines scramble to get their fair share of the pie.

THAI Airways International, the country's flag carrier and a full-service airline is already feeling the pinch as continues to rack up losses for the second year in a row.

THAI also owns THAI Smile, a premium-service airline while, at the same time, holds a substantial stake in Nok Air, a budget carrier. In effect, THAI Group caters to all segments of the commercial aviation market.

Its premium-service airline, however, casts a positive outlook amidst the growing competition in the commercial aviation industry, in general. While it has no competition in its own game in the premium service sector, it is feeling the pressure from both sides of the fence, nonetheless.

According to THAI Group president, Sorajak Kasemsuvan, THAI Smile will continue to be the group's growth driver next year. His projection is primarily based on the continued slump in the European market, the major revenue contributor for THAI Airways.

Europe has been THAI's major market for many years, making Thailand one of the major destinations for millions of European tourists to Asia.

The travel market in the continent has been hardly hit by the economic crisis across the European Community in the past few years. The economy-class category, especially, faces severe pricing war among airlines serving the vast but contracting market, causing many carriers to either terminate their service or reduce capacity with less frequency or downgrade their aircraft.

THAI Smile, however, considers this challenge an opportunity to capture a new market for its premium service. THAI Smile is unique among airlines operating neither as a full-service nor a low-cost carrier. Rather, it follows its own business model offering tickets much lower than full-service airlines but higher than budget carriers.

THAI Group's senior vice president for commercial operations, Chokchai Panyayong, is optimistic that the premium airline will log a double-digit growth this year despite the tough competition in the domestic sector.

THAI Airways International launched THAI Smile last year to cater to market not served by either full-service or no-frills airlines.

The airline has a current fleet of 9 aircraft all of which are the narrow-body A320s.

To date, the premium-service airline flies to 7 domestic and 8 international destinations. All flights operate from Bangkok and these include (international routes) Macau, Mandalay, Ahmedabad, Colombo, Vientiane, Luang Prabang and most recently, Changsha and Chongqing; (domestic routes) Chiang Mai, Hat Yai, Krabi, Phuket, Surat Thani, Ubon Ratchathani and Ubon Thani. By January next year, It will addChiang Rai to its domestic network.

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