Sunday, 22 May 2011

THAI to launch own low costairline next year

Thai Airways International (THAI) will operฌate a new super lowcost airline next year, aimed at beating back the challenge from budget carriers and reclaiming passengers back to the national airline.

The announcement comes after the board of directors allowed Ampon Kittiampon to continue as chairman for another threeyear term.

The move is seen as an attempt by the THAI management to pave the way for having its own super lowcost airline despite signing an agreement with Singaporebased Tiger Airways last year to establish a joint venture budget airline. The joint venture, Thai Tiger Airways, is expected to start services this month.

Ampon Kittiampon, chairman of the board of directors, said the board yesterday approved a plan to establish a new lowcost airline as part of its 12year business plan.

The airline has already extended its agreement with Tiger Airways for another three months, from June to August this year, to continue the project.

The agreement extension is to avoid a possible suit by Tiger Airways for violation of the contract.

Ampon said the company would set up a new business unit to run the new lowcost airline. The company plans to start the service in March or April next year.

The new airline can be run without approval from the Ministry of Transport or the Cabinet as it is wholly owned by THAI.

According to sources, some in the internal management want to call the new airline Thai Wings or Thai Silk.

He said the new airline would position itself in the lowest segment, similar to lowcost airlines operating in the market.

"At the moment, THAI maintains its plan to run both Thai Tiger Airways and Thai Wings. However, THAI should keep only the best one in the future," he said.

Thai Wings will operate in the domestic market and regional destinations such as Singapore, Hong Kong and Macau.

Thai Airways will remain a premium airฌine, Thai Tiger Airways will focus on regional markets and Thai Wings will be a lowcost airline. THAI will use retired pilots for the airฌline and will source cabin crew and staffs from outsource company Wind Span Co - like most other lowcost carriers.

THAI president Piyasvasti Amrannand will head the unit and a new management will take over later.

THAI will utilise its five Boeing 737s, and rent two narrowbodied aircraft for the first year of operations. The new carrier will need 11 aircraft. Each of the aircraft will feature up to 99percent economy class seats, with no business or first class.

Ampon said the company would break even within the first year of operation as the cost is not very high. It expects to achieve a 7080 per cent load factor in the first year.

He added that Nok Air, THAI's lowcost subsidiary, would continue its services.

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