WHY THAI AIRWAYS IS IN TROUBLE
Earlier this week Thai Airways International reported a large drop in passenger numbers, citing the H1N1 influenza pandemic. The national flag carrier has also been negotiating to delay the delivery (and payment) of its six Airbus A380s.
It's certain the H1N1 outbreak and the global economic crisis are taking there toll on international travel, but Thai's problems stem from their inability to compete on price.
To prove this I've conducted my own investigation. Using only airline websites and opting for the cheapest possible fares I discovered just how uncompetitive Thai Airways really is.
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The first theoretical trip is from Bangkok to Singapore, departing on the morning of Thursday, August 20th and returning on the evening of Sunday, August 23rd. To even the results I've included the extras to take account of a 20kg baggage allowance that is charged by some low-cost carriers.
Jetstar - 3,469 baht
Tiger Airways - 4,665 baht
Cathay Pacific - 5,710 baht
Thai Air Asia - 5,808 baht
Singapore Airlines - 8,420 baht
* Malaysia Airlines - 9,330 baht
Thai Airways - 9,825 baht
* Indirect flight.
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The second theoretical flight is on the ultra competitive Bangkok - London route on Tuesday, October 20th, returning a week later on Tuesday, October 27th. In the very few cases where pricing was not offered in Thai baht I have used exchange rates from xe.com.
* Qatar Airways - 25,855 baht
* Etihad - 28,120 baht
* Austrian Airlines - 28,135 baht
Eva Airways - 29,095 baht
* Air Berlin - 31,980 baht
* Turkish Airlines - 33,075 baht
* Malaysian Airlines - 33,490 baht
* Jet Airways - 34,920 baht
* Swiss - 35,880 baht
British Airways - 36,790 baht
* KLM - 37,470 baht
* Gulf Air - 37,820 baht
* Emirates - 38,745 baht
* Lufthansa - 38,815 baht
* Alitalia - 41,204 baht
* Cathay Pacific - 43,135 baht
* Singapore Airlines - 44,010 baht
* Air France - 48,075 baht
Qantas - 49,090 baht
* Finnair - 49,415 baht
Thai Airways - 66,965 baht
* - Indirect flight.
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Just to reiterate these were the cheapest available options offered by the airlines' own websites and are inclusive of all applicable taxes. These rates were available for booking during the evening of Thursday, July 16.
Data from the company's Investor Relations website for May, the last available figures, shows a total load factor across the airline of 57.5 per cent - down 15.2 per cent from the same month last year. The only area where the company is making money from its passenger services in on domestic routes.
You can see clearly that Thai Airways may be citing man reasons for its current problems, but when it comes down to price they're the most expensive. And in the current economic climate that makes all the difference.
6 comments:
i won't fly TG..
I have flown Thai in the past on a number of routes including to both Singapore and London. The one area where they fail, as far as the London route was concerned, is entertainment. The last time I traveled they were using their older 747-400s without seat back entertainment. That's important on such a long flight.
Right now the significant factor when I book is price. I have flown Qatar and they're good. I see no reason at all to pay more than 40,000 baht extra (using the example in my post) to fly Thai.
It's not enough to simply say that Thai's problems stem from the fact that it can't compete on price. You have to look at the reasons why that is so.
One of the largest problems is the bloated and inefficient payroll. Thai's managers, as in many other Thai businesses, measure their standing in feudal fashion by how many people they command rather than the standards of efficiency they can attain. And the leakage of payroll goes beyond even this simple form of patronage as there are many ghost employees -- political cronies, family members and mia nois -- who draw a Thai Airways paycheck but never report for work.
The other major problem is in the subcontracting system. Many contracts are awarded without competitive bidding to afford managers the opportunity to take kickbacks. And there are many instances where functions are performed in-house that could be handled much more efficiently by outsourcing but that takes us back to the payroll and head-count problems.
What would be a scandal of the first magnitude in virtually any other flag carrier in the world is just business as usual at Thai Airways.
In the past 2 years I clocked up just over 250,000 Air mile on Thai Airways, the vast majority being Business class on the LHR-BKK-LHR route (TG 916/910/911). Slowly the quality of service has declined and the price has risen, it is now ludicrous the rates charged, especially given that Qantas, BA, Eva and Etihad are all offering far lower fares with far better services and on planes that do not date back to the dawn of aviation.
Its sad but my belief is that Thai Airways needs to be penalised by foreign aviation regulators for their poor service, constant delays and lack of ability to offer an equal level of service, and possible safety, for passengers to that of other carriers.
The last time I have flown TG I was really surprised by how much things have changed compared to what was 2-3 years ago. Wont be flying it for sometime now I guess. Love Emirates now. :)
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บุฟเฟ่ต์ในกรุงเทพ
Buffets in Bangkok
I fly regularly to bangkok from London. I used to Fly TG on a regular basis, stopped using them for about 4 years now. you get a much better service and competitive price on other carriers like Eva, Qatar, Emirates and Etihad. not to mention old and tatty 747's
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