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THAI Smile expands India routes as parent national carrier faces B10bn loss

THAI Smile expands India routes as parent national carrier faces B10bn loss

BANGKOK: THAI Smile, a wholly owned subsidiary of Thai International Airways, is set to add more direct flights to India to cash in on growing visitor numbers. The move comes as the loss-ridden national flag carrier THAI may be in danger of running up net losses of well over B10 billion baht this year.

tourismtransporteconomics
By Bangkok Post

Friday 4 October 2019, 09:34AM


THAI Smile is set to add more direct flights to India to cash in on growing visitor numbers. Photo: Bangkok Post / file

THAI Smile is set to add more direct flights to India to cash in on growing visitor numbers. Photo: Bangkok Post / file

The inaugural direct THAI Smile flight for Ahmedabad-Bangkok, the airline's seventh route in India, will take off from Sardar Vallabhbhai Patel Airport in route to Suvarnabhumi on Oct 28. The route is scheduled to have four flights a week.

Chief executive Charita Leelayudth said THAI Smile is expanding routes to India and offers 38 weekly flights to seven cities: Gaya, Varanasi, Jaipur, Lucknow, Mumbai, Kolkata and Ahmedabad.

“We have enjoyed growth of both inbound and outbound passengers, leading to an increased cabin factor on every route,” Ms Charita said. “In some periods this year, the number rose to more than 85%. Overall, THAI Smile has seen growth of around 20% on Indian routes, reflecting more Indian arrivals in Thailand.”

Arrivals from India have expanded significantly after the Thai government waived the B2,000 visa-on-arrival fee for 19 nations, including India and China, until the end of next April.

The Tourism and Sports Ministry said 1.31 million Indians visited Thailand in the first eight months of this year, up 25.4% year-on-year. With the strong pace, arrivals are projected to reach 2 million this year, up from 1.6mn in 2018.

Ms Charita said passengers fall into many categories, including businessmen, tourists, Indians with family in Thailand and couples coming for weddings or honeymoons.

Many of the Indian cities served by THAI Smile are attracting a new generation of Thai tourists who are interested in novel destinations.

 

Meanwhile, Deputy Transport Minister Thaworn Senneam has expressed concern that the loss-ridden national flag carrier Thai Airways International (THAI) may be in danger of running up net losses of well over B10bn baht this year.

He said the financial rehabilitation programme implemented nearly a year ago does not seem to be working, noting yesterday (Oct 3) that the airline reported a loss of well over 6 billion baht in the first half of this year alone.

“THAI is now in crisis. Its financial status is in a critical condition. The question is, how well aware is the airline's board chairman about this matter,” he added.

The deputy minister said he wondered how serious the airline’s executives were in discussing and dealing with the worsening financial situation.

He said the executives responded poorly to his assignments aimed at easing the carrier’s financial woes.

“There will be a lot more assignments to hand out regarding their [business rehabilitation and investment] plans, which need to be revised,” he said.

Thai Residential

Despite his pledge to pull the national carrier out of trouble, Mr Thaworn admitted he lacks the authority to fire its executives for underperforming.

He also cautioned the airline about its plan to boost liquidity via a B50.8bn loan from the government, saying THAI must think carefully before taking such a step with taxpayers’ money.

“If things go awry, someone will have to be held responsible,” he said.

The loan request has already been submitted to the Finance Ministry, he said, adding that efficiency of the airline’s financial rehabilitation programme will definitely be taken into account when assessing its ability to repay the debt.

If the loan is granted, B32bn will be set aside as working capital while the rest would boost the airline’s cash flow, said a source at the ministry.

The government’s public debt management committee, chaired by the finance minister, has expressed concern over THAI’s liquidity problem and further debt from a planned purchase of 38 aircraft, said the same source. Mr Thaworn has since ordered revisions to the purchase plan.

The committee recommended that the Transport Ministry act to revitalise the airline’s finances, said the source.

Mr Thaworn said the airline has not yet responded to his question of where it will obtain the loan to finance the B156bn aircraft purchase. He also queried its long-term business plan for utilising the new aircraft and its marketing strategy to compete with low-cost airlines.

The deputy minister said the airline plans to deploy the first batch of 25 new airliners for medium-range flights of five to six hours from Bangkok.

That would put THAI in direct competition with low-cost carriers. Mr Thaworn said the national carrier’s only strategy to win back customers from budget airlines was to offer customers premium services.

 

Read original stories here and here.

 

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