Thai carriers hurt by political unrest

Thai airlines are cutting capacity on domestic and international routes to weather a slump in demand caused by recent violent political turmoil in Thailand.

1st Jun 2010


Thai airlines are cutting capacity on domestic and international routes to weather a slump in demand caused by recent violent political turmoil in Thailand. Flag carrier Thai Airways International, which is worst-hit by the crisis, was poised to cut capacity by 15 percent starting from June. The carrier has suspended its daily Bangkok-Sydney-Brisbane-Bangkok flights indefinitely.


The ten weekly Mumbai services operated by Boeing 777-200 aircraft will be reduced to one daily flight, while the daily Delhi service, using 777-300s, will be downgraded to a 777-200 service. Twice-daily Airbus A340-600 flights to Dubai will also be downgraded to 777-200 services. The four-times weekly 777-200ER service to Athens is being reduced to thrice weekly and will be operated using 777-300s.


According to Thai Airways president Piyasvasti Amaranand, demand on European, Australian and Indian routes has dropped significantly.
“We are left with no choice but to take the necessary measures to avoid further losses,” Piyasvasti said.


The carrier’s May domestic and international bookings only accounted for 52 percent of capacity, as 47 countries issued travel advisories to their citizens about Thailand. Piyasvasti said Thai Airways hopes to achieve at least 70 percent bookings for June and July, if the situation improves.


In the wake of a first-quarter profit of 10.72 billion baht (US$326.8 million) up 36.4 percent over the same period last year, Piyasvasti is worried that the second quarter will now be hurt by the political unrest.


“Thai Airways was badly hit by the volcano eruption in Iceland in May and now the violent political turmoil in Thailand,” Piyasvasti says.
The anti-government protests, which started in Bangkok on 15 March have turned violent and spread to Chiang Mai and Ubon Ratchathani provinces. As Asian Aviation went to press, 38 people had been killed and more than 320 injured.


“We are hoping that the unrest does not spread to other parts of the country, because if it does it will have a severe impact on the local civil aviation industry,” Piyasvasti says.


Bangkok Airways, Thailand’s second-biggest airline is hoping to attract more local tourists to Phuket, Koh Samui and Trat, the country’s three most popular destinations, as demand from overseas tourists has plummeted.


Bangkok Airways vice-president Nandhika Varavam says passenger numbers dropped 30 percent in April and 52 percent in May, while bookings for June and July have also been slow.


“We are feeling the impact of the slump in traffic due to our dependence on the international market that comprises 80 percent of our passenger numbers,” she says.
Bangkok Airways expects passenger numbers to drop 70 percent, should the unrest escalate. The airline will launch a marketing campaign in July to promote Phuket, Samui and Trat locally. The airline will offer free hotel accommodation to passengers flying to the three destinations.


The carrier has no current plans to ground any aircraft.

Asian Aviation at a glance