Rising costs force THAI fare hikes

Post by **admin** » October 18, 2005, 9:01 am

Rising costs force THAI fare hikes

BOONSONG KOSITCHOTETHANA

Thai Airways International will raise the fares on its domestic services by 200 to 300 baht for most flights on Nov 1 to help reduce losses. The national carrier will also increase international fares by 3-5% next month to make up for higher costs.

But the increases, the first in domestic fares since 2001, may not be large enough to pull the national carrier out of the red, because increases are capped by the authorities.

Though the Department of Civil Aviation has yet to formally grant permission for the increase, Vasing Kittikul, THAI's executive vice-president for commercial affairs, said he didn't anticipate a problem.

He said the average fare, at about 4.19 baht per kilometre, did not exceed the ceiling set by the department at 6.82 baht.

A one-way ticket on the Bangkok-Chiang Mai route will rise by 200 baht, while fares for THAI flights to Khon Kaen, Krabi, Nakhon Si Thammarat, Phitsanulok, Surat Thani, Trang, Ubon Ratchathani and Udon Thani are to increase by 300 baht.

However, a one-way Chiang Mai-Phuket fare will rise by 400 baht and the fare on the feeder route linking Chiang Mai and Mae Hong Son is to increase to 1,000 baht from 765 baht now, amounting to 8.33 baht/km, above the cap.

The economy return fare between Bangkok and Chiang Mai will rise to 4,740 baht from 4,340 baht. Adding extras including airport tax, the fuel surcharge and insurance fees, which total 810 baht, the total will be 5,550 baht.

While other conventional and low-cost carriers are expected to follow suit, an official of Bangkok Airways yesterday said it had no plan to increase its domestic fares.

The latest fare increase of THAI will widen the gap between fares charged by conventional airlines and no-frills carriers, which could lead passengers to go for budget airlines.

Nok Air, the low-cost carrier affiliated with THAI, charges 3,100 baht including all extra fees for a Bangkok-Chiang Mai return ticket, 56% of the national carrier's new fare.

A Nok Air executive said the airline had no immediate plans to increase the basic fare.

Meanwhile, Mr Vasing said that the fuel surcharge for domestic services would remain unchanged at 300 baht per sector, which is similar to Nok Air's, despite a continuous climb in the price of jet fuel.

Post by **BangkokButcher** » October 18, 2005, 2:13 pm

Are Thai airways in some kind of financial trouble??

Post by **pitsamai** » October 18, 2005, 2:42 pm

Maybe they are a little overstaffed....
or Quality has its price ?

Post by **BobHelm** » October 18, 2005, 3:43 pm

Sean, this is a quote from internet on 18/08/2005
"Thai Airways International is promissed a quick turnaround back to profitability, by its new CEO, director and acting interim chief.
THAI will cut back on loss-making routes, restructure foreign operations, focus on corporate sales and improve services in an effort to turn its books around over the next 3 months.
THAI would postpone flights to Johannesburg.
Non-stop flights to Los Angeles will be put on hold.
Bangkok-Brisbane-Auckland route will be cut back to Bangkok-Brisbane.
Bangkok-Sydney-Melbourne route will now be Bangkok-Sydney.
Bangkok-Singapore-Denpasar will instead become Bangkok-Singapore.
All loss-making domestic routes will be handed over to its low-cost subsidiary, Nok Air.
THAI plans a change of gauge, bringing in 2 ATRs to help reduce costs.
The CEO will take drastic new cut back measures on staff."
This is From the day before:
Thai Airways International yesterday reported third-quarter losses of 4.77 billion baht.
In 2004 Q3 Thai lost 913.15 million baht.

THAI shares closed yesterday on the Stock Exchange of Thailand at 35.75 baht, unchanged, but over the past year, shares have fallen 26% in value.
This is from last Sunday:
Thai Airways International will reduce US service as it is not happy with the performance on these routes. On Dec 1st it will reduce the frequency on its Bangkok to New York route from 6 to 4 flights a week while cutting Bangkok to Los Angeles from 4 to 3 flights a week however that flight will go nonstop instead of via Japan. Thai will also revise its Bangkok-Auckland-Sydney route on the same date into a daily Bangkok-Auckland and daily Bangkok-Sydney service

Post by **BangkokButcher** » October 18, 2005, 4:09 pm

Thanks for the Bob, it looks a bit bleak imo, let's hope they can turn it around.