Thai finds new uses for its super-sized aircraft
International has just put its first into commercial service, but the aviation scene has changed dramatically since the carrier decided to buy the ultra-large aircraft.
When Thai ordered six A380s in 2004, then-president Kanok Abhiradee said the A380s would be used on high-density routes from Australia via Bangkok to London and Frankfurt. However, the success of Middle Eastern carriersâ€”Emirates andâ€”on the â€śKangaroo route,â€ť linking Australia and Europe, has altered the aviation landscape, generally making it tougher for Thai. But one positive has been the increase in intra-Asia traffic.
As a consequence, â€śThai no longer plans to deploy its A380s to London, although it will still operate the aircraft to Frankfurt, where it links up withpartner . To increase utilization, Thai plans to also operate its 507-seat A380s on some Asian sectors.
â€śThai will not compete head-to-head with the Gulf carriers in the crowded Kangaroo route from the U.K. to Australia. Instead, we have put our luxury Airbus-600 aircraft twice-daily to Heathrow targeting the premium segment of the market,â€ť says Executive Vice President of Strategy and Business Development Chokchai Panyayong.
Chokchai says Thai's market share on the Kangaroo route â€śhas deteriorated but we continue to maintain our presence. [Instead] we have decided to put our A380s on routes to Europe and Asia that have potential for higher yields.â€ť He specifically cites Frankfurt and Paris in Europe and to Tokyo Narita; Osaka, Japan; and Hong Kong in Asia, along with Sydney in Australia.
Thai received its first A380 on Sept. 27 and deployed it on the Bangkok-Singapore and Bangkok-Hong Kong routes in October. When the second aircraft is delivered in December, the airline will switch the A380 from the Singapore route, deploying it to Frankfurt where it will replace the carrier's-400s.
â€śOur European performance has been highly impacted by the fierce expansion of the Middle Eastern carriersâ€ť and the poor economic situation in Europe, Chokchai says. â€śThai's strategy aims to . . . maintain our main destinations in Europe, while expanding and shifting capacity to high-growth markets in Asia.â€ť
Thai has benefited over the years from Bangkok being the main gateway into Myanmar and Indochina. This was the case because these less-developed markets had no local carriers with an international presence. Thai, however, faces a challenge: Vietnam Airlines has been expanding internationally and is trying to position Ho Chi Minh City as the gateway into Indochina and Myanmar. Lao Airlines, meanwhile, has moved beyond turboprops to Airbuson international routes.
Chokchai says: â€śBangkok still accounts for 43% of the international seat capacity into Myanmar, which is better than Singapore and Kuala Lumpur, which only account for 21% and 13%, respectively.â€ť
As for Indochina, Chokchai says the airline's market share has deteriorated due to low-cost carriers. â€śThai has lost some local traffic, but we have gained in terms of network-connecting traffic,â€ť he adds. However, Thai is fighting back with its new short-haul operation, Thai Smile, which launched in July. It now has four 174-seat Airbus A320s and aims to have a fleet of 11 of the type by 2015. Chokchai says this full-service leisure carrier, which has â€śat least a 20% lower-cost baseâ€ť than Thai's mainline short-haul operation, will be targeting Indochina.