Piyasvasti Amranand, president of Thai Airways International, tells Margie T Logarta about the airline's plans for growth, new products and new aircraft.
You presented a comprehensive growth plan for Thai Airways in October 2010 at the closing ceremonies of an event in Bangkok to mark your airline’s 50th anniversary. Is this on track?
Yes, things are moving as planned. The average age of our planes is 11.7 years; some are 20 years old and have to be retired, whilst others are pretty young. Last year, we signed contracts to acquire 15 planes. Delivery will not be immediately of course, it will take time. Those were for seven A330s, purchased from Airbus and eight B777s on a long-term operating lease. This was in line with our six-year plan to acquire 37 planes in the next five years (2012-2017), consisting of 11 narrow bodied aircraft and 26 wide-bodied aircraft. This will grow our fleet from 85 to 105 planes by 2017 bringing down the average age to 8.5 years by 2017. At the same time too, we will be retiring some planes. We still haven’t decided which company will supply our wide bodies. We will use the narrow bodies for domestic, short-haul and regional routes, and the wide bodies for the long-haul and medium-haul routes.
What products will passengers expect to find on these new aircraft?
Obviously, we would like to have the best. But some planes will not come with first class because we lose money on first class, and on some routes, like Scandinavia, there is not much demand for this product. It’s business and economy class where money is made, so that has to be top priority.
And what about the new A330?
The new A330 that starts flying on March 28, 2011 will initially be operating on the Japanese routes. It will have two classes, business and economy, and shell-type seats in business that recline to 170 degrees and feature a pitch of 58 inches and measure 20 inches wide. The personal screens in these seats will be 15 inches and there will be connectivity and both classes enjoying AVOD. This was not standard across the fleet, and that’s why we are also retrofitting IFE on 20 aircraft in our fleet – the economy class of eight B777 and economy class of six B747s – to come out gradually from the second quarter of this year. The last six B747s will be done by 2012. Then, we will have on-demand entertainment in all classes and consistently good quality products in our planes.
After these 20, we will start the second phase of our retrofit plans that involves the A340s, A345s and A346s. We have to make sure not to retrofit too quickly or we won’t have enough planes to fly around.
Will a premium economy cabin be part of the product enhancements?
We do have a premium economy product but only on four A345 aircraft. To expand is not something we are looking at right now. But we continue to review this and we are also looking at Air New Zealand’s Sky Couch but from another designer.
What are your plans for the A380 – the first of six on being delivered next year?
That will arrive in the third quarter of next year. The A380 will come in pretty handy for services where there is excess demand and at airports where we are given few slots – London Heathrow is a good example, and Frankfurt as well. As the plane was ordered some time ago, it won’t be the top of the line, and there is a limitation to the modifications you can make at this time. Its first class won’t have a mini suite, but we were able to change the set up a bit to give more privacy and have bigger TV screens in economy. First and business class will be located on the upper deck and there will be a total of over 500 seats. As for premium economy seats, it’s too late to add them in now.
Do the delays of the next-generation aircraft delivery constrain your acquisition plans in any way?
We are a number of years behind the others (in terms of ordering new-generation aircraft). There is an advantage to being slow. By the time we get the A380, hopefully, they will have solved its problems. If there are (more) problems, we have other options.
Thai Tiger Airways (the low-cost carrier venture of Thai Airways and Tiger Airways was recently given the government green light to proceed) How will that not affect your subsidiary Nok Air?
Nok Air is determined to stick to domestic routes. There may be some competition between Thai Tiger and Nok as Thai Tiger will do some domestic routes. But it will be operating out of Suvarnabhumi Airport, while Nok Air is operating out of Don Meung Airport, and it will also be serving domestic routes that no one else is serving. In fact, we are in the process of acquiring another 4 ATR aircraft for Nok to better serve some of these (domestic) destinations.
Overall, Thai Tiger really has quite a separate market segment. It will also be flying regional routes, which we are finalizing, using A320s. And these routes should be profitable like Bangkok-Singapore where Tiger Airways is already flying.
But Thai Airways also serves this route...
There’s no loss of revenue for Thai as we are just substituting Thai Tiger in place of Tiger. If you look at the landscape, we have lost market share already to AirAsia and other low-cost carriers (by not having one of our own flying regionally). There are many more coming into Thailand. Unless we do something, we will lose more market share.
There are millions of people in Thailand, India and China who have never flown before. If they fly the first time, they are sure to use the services of a low-cost airline. That’s the market segment growing most rapidly.
Thai Tiger will be a separate entity and brand from Thai Airways. But if they buy a ticket on Thai Tiger, they can still continue to fly on our network.
Any updates on new code shares or destinations for Thai?
The code share with Turkish Airlines has been concluded, which is good because we don’t fly to Istanbul, and they don’t fly beyond Bangkok. So their passengers can fly with us to Sydney or Melbourne. We don’t plan any new destinations in the next one to two years because we don’t have enough planes during this period but if we do, it could be another destination in Europe.
As a founding member of Star Alliance, what do you think the group has to do across its network to respond to passengers’ frustrations about the inconsistent quality of service standards from one airline to another.
And there are plans to grow Star Alliance even bigger!
We recognise the problem of the need to make services more consistent and connections seamless as they should be. There are issues in many areas which we really have to work a lot harder and quicker to resolve them, especially in order to compete with the Middle East airlines. We have to increase cooperation to improve service standards – everyone agrees but it’s the implementation that is the problem.
The Middle Eastern carriers are a big threat to everyone in the Star Alliance. They don’t need to form an alliance with anybody – one airline is already like an alliance.
From feedback from customers, what do you see remains the most important concerns about their experience with Thai?
Seats and inflight entertainment. Service of the staff is not that high up on the list of complaints. But I foresee that things will improve quite substantially from the second quarter when the new planes come in. Of course, at each touch point – the call centres, ticket purchasing, the lounge – there are always issues but the seat is key.