What is the future of THAI Smile?

19th Mar 2015

Thai Smile is nearing a point of real crisis due to the decision by the parent company Thai International Airways to restructure most of its networks and fleets. This is according to a report published by Centre for Asia-Pacific Aviation.

The Thai Airways major subsidiary airline could now be used to absorb Thai Airways' unprofitable routes as claimed the CAPA report. Thai Smile now finds itself as a subsidiary only used by its parent company to enlarge its point-to-point business and keep Thai Airways' LCCs completion alive.

The CAPA report also claims that Thai Smile now has the responsibility of acting as a feeder for Thai Airways' main international gateway of Suvarnabhumi. At the same time, THAI Smile now acts as competition to LCCs on domestic routes from Don Mueang, Bangkok's main airport.

The report also claims that these roles are going to prove tough to maintain by THAI Smile since it is difficult to balance them. The report gives the lack of a cost structure by THAI Smiles over the years as prove enough that the subsidiary airline will not be able to cope with the competition posed by the LCCs.

Thai Smile has taken a few directives to enable it cope with these new challenges brought about by the parent company of THAI airways. The airline for instance has taken over several domestic routes and is planning a move towards making the roles easier to handle. It also launched 10 daily flights from Bangkok's main airport.

According to local observers, the contradictory roles given to THAI Smiles are politically motivated rather than commercially helpful. Thai Airways has had its business laws changed every now and then, and the move not to promote the subsidiary airline to an independent company is just one of the many notable deviations.

Thai Smiles is looking to surrender its services from Suvarnabhumi to Krabi entirely to Thai Airways. This move is likely to see the airline deal with the difficult roles quite effectively. Thai Smiles thinks that Thai Airways will be able to completely operate in Krabi.

Thai Smiles is also looking to add another domestic route on the 5th as it takes over the duty from Thai Airways of overseeing the Suvarnabhumi-Khon Kaen route. This move is aimed to reduce the number of routes owned by the parent airline. This will only leave Thai airways with 5 domestic routes.

THAI Smiles is looking to include Singapore when launching its international point to point routes from Don Mueang. According to the CAPA report, this move will help THAI compete well with the LCCs.

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