Home' Asian Aviation : AAV February 2011 Contents AsianAviation | FEBRUARY 2011 17
Justin Wastnage / Brunei
Thai eyes future with confidence
ai people are famed for their friendly smiles, but
given the violent political protests a icting the
country since 2008, one could forgive ai Airways
International employees if they were less than
optimistic about travel demand in the coming year.
Yet Teerapol Chotichanapibal, the airline's acting
commercial executive vice-president, is decidedly
upbeat. e airline reported a net pro t of 136.4
million baht (US$4.5 million) for the third quarter
of 2010 -- its rst positive quarterly result since
2008. e carrier had previously never run at a loss.
e pro t gure, although about seven times
less than most Thai analysts predicted, came
largely because of a recovery in tourist demand and
aggressive cost-cutting. In the same July-September
quarter a year earlier, the carrier lost 4.03 billion
"We are not doing badly, despite everything, and
we are looking forward to 2011," Terrapol says.
He describes the protests by the United Front
for Democracy Against Dictatorship, commonly
known as the 'red shirts,' as being one of the biggest
"dents" in annual gures for the 2010 business year.
But he adds that the ight disruptions caused early
in the year by the ash cloud from Icelandic volcano
Mount Eyja allaj kull caused a dent of equal or
Regardless of the protests and volcanic eruption,
ai had already had an eventful few years, including
battling natural disasters and a coup d'état. Indeed,
things could be much worse, Teerapol says.
"If you look at our books, we've not been doing
too badly. We've been doing very well at controlling
costs," he says.
Catering --a department in which Teerapol is also
managing director -- was one element of the business
a ected by cost-cutting plans. ai's kitchens in
Bangkok produce up to 80,000 meals per day for
the airline's own ights and for 50 other carriers.
Many of those airlines have re-tendered recently,
putting more pressure on the commercial kitchen
to have lower costs while maintaining quality, the
But Teerapol is most proud of the 10 billion baht
saved in fuel and indirect costs this year, which came
in addition to 14.8 billion baht saved over the past
two years. Better fuel-management has been the
result of data reporting and analysis of the way the
carrier uses jet fuel. ai has managed to bring its
average fuel burn down to 388ml/km, from 406ml/
km in 2006.
All costs, including fuel, are down by 5 percent
per available seat kilometre, he says. Much of this
has been achieved by procedural changes to reduce
controllable elements like o -block taxiing time
and better use of flexible flight plans, he said.
Minimising on-ground use of auxiliary power units
was also given priority at Suvarnabhumi, which
itself has energ y saving design built in.
e carrier, which celebrated its 50th anniversary
in May, has embarked on a plan for the next half-
century, which it is calling its TG100 Strateg y.
e plan builds upon ai's heritage as an aviation
pioneer in Asia to combat new threats -- chie y
competition from low-cost carriers -- and reduce
its environmental impact.
Part of TG100 is the joint venture being formed
with Singapore's Tiger Air ways to form ai Tiger
Air ways, announced in August. is plan comes
despite ai already being a major shareholder
in no frills airline Nok Air, which is based at
Bangkok's older Don Muang airport, ai's former
base. In contrast to Boeing 737 operator Nok
Air, Suvarnabhumi-based ai Tiger will operate
14 Airbus A320 narrowbodies and is expected to
commence ser vices around March next year.
ai Tiger will allow route expansion without
overstretching the mainline carrier. Teerapol says
that during the mid-2000s the airline got caught up
in a race to announce new routes, in part to satisfy
investors and the press.
"It's not economical to have thin routes.
Instead, we will solidify our existing routes, adding
more frequencies," he says. Ser vices to Moscow's
Domodedovo airport will increase to a daily
frequency, for example, as will ights to Madrid
e slow, steady eet expansion will go hand-in-
hand with eet renewal.
e carrier is momentarily stuck with its Airbus
A340-500s, which are used for ser vices to New
York's Newark Airport, where fellow Star Alliance
carrier Continental Airlines has a hub. But under
a government-backed four-year aircra acquisition
plan, ai will retire its six ageing Boeing 747-400s,
ten A300-600s, four Airbus A340-500s and three
To replace these, the airline will acquire seven
A330-300s, eight 777-300ERs and a rumoured
six A380-800s. A parallel aircra -refurbishment
program will see the entire eet re tted over the
coming ve years.
Teerapol acknowledges that ailand has been
experiencing turbulent times. But he also knows
that Bangkok remains one of Asia's foremost cities
with world-class onward air connections, allowing
the ai ag carrier to face the future with con dent
Thai Airways is expected to acquire as many as six Airbus A380-800s.
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