BANGKOK, Thailand (eTN) – PATA’s first Bangkok Hub City Forum was hosted in the Thai capital – organized by the PATA Thailand Chapter with the support of PATA headquarters – and gave an opportunity to many high profiles from the tourism and transport industry to look at the future of Thai tourism. This was also an opportunity for Thai Airways (TG) President Piyasvasti Amranand to present the challenges faced by Thailand’s national airline in an increasingly competitive market.
Mr. Piyasvasti surprised his audience with his speech, which was “one of the most honest ever heard in the mouth of an airline president,” acknowledged Martin J. Craigs, PATA CEO.
Thai Airways’ President did indeed not hide facts, regretting that old habits are hard to die. Employees at Thai Airways have always been living in a comfort zone. Being owned by the government (the Ministry of Finance is TG’s main shareholder with 51.03 percent of the capital), Thai Airways International is assured of a certain financial stability. Even if the airline loses money, the government is unlikely to let its national carrier collapse. But it is a blessing in disguise.
Government’s intervention is, in return, permanent, leaving TG management with little autonomy for possible commercial and strategic maneuvers. Aircraft acquisition remains a top problem for TG and booking technology is moving at the speed of the snail. A joint venture with Singaporean Tiger Airways to create a low-cost subsidiary is facing opposition from local politicians, who played on nationalism feelings and looked out for their own interests.
Bluntly admitted by Mr. Amranand: “Thai Airways is a kind of old airline marred with old aircraft, ageing staff, and antique working habits”.
Decisions to modernize the fleet were postponed many times in the past. According to Pyasvasti Amranand, the average fleet age for TG is now among the highest in Asia at 11.3 years, only beaten by Malaysia Airlines with 12.3 years, but far behind from Singapore Airlines (5.8 years) or even Garuda Indonesia Airlines (6.8 years). It will anyway change as TG is due to receive in the period 2011-2022 some 75 aircraft, including its first Airbus A380 by the end of the year. From 89 aircraft in 2011, Thai Airways’ fleet will then reach 105 aircraft. Aircraft of older generations, such as the Boeing 747-400, will at the same time been retrofitted.
“One of the customers’ top complaints has been old seats and limited on-board entertainment. All of our long-haul aircraft will have been retrofitted with a new product by the end of the year,” indicated Mr. Amranand.
Thai Airways has been overstaffed for a long time with some 20 percent to 30 percent more employees than competition of similar size. Nepotism is one reason to the staff inflation, which is protected by powerful unions. But collusion has also been particularly evident in the recruitment of flying personnel, especially senior staff affected in premium class on long-haul flights. They generally are twice as old – if not more – than the attractive Thai Airways flying girls seen on the carrier’s advertising campaigns.
Thai Airways’ CEO admitted behind the lines that this is a legacy of old days when staff was recruited rather for their names – they generally come from “hi-so” families – than for their real skills in service. Mr. Piyasvasti tries now to rectify the imbalance: he promises that the average age of flying staff will be down to 30 years old, and above all, they will be enthusiastic. The new value brand airline, “Thai Smile,” due to take off next July to regional destinations, will serve as a benchmark for Thai staff’s new spirit and sense of welcome.
Piyasvasti’s efforts to drive Thai Airways to new heights and make the kingdom again proud of its national carrier will become more visible over the months to come. The airline will roll an upgrade product in business and first class, will improve inflight meals, and will push flying personnel’s training to make them more attentive to passengers. The objective is to make again Thai Airways into the top three airlines in Asia. According to Skytrack rankings for 2011, Thai Airways moved to the fifth position for its service in 2011, up from the tenth position in 2009. This looks like the first encouraging sign for Thai Airways’ CEO.