Can TG's restructuring stop the slow decline of the airline?

[fountainhall]

The announcement yesterday that TG will be cutting staff and axing routes is hardly new. It was all made public at the start of the year.

For some based in the US, the loss of the 1-stop LAX route may be a slight problem, the more so as it comes after the cancellation of the JFK route half a dozen or so years ago. Both started up with great fanfare as non-stop services. The real problem was that TG's management made a stupid mistake by purchasing a fleet of A340-600 aircraft to service these routes. With four engines, that plane is a gas guzzler compared to the ultra long range twin engine 777s that were introduced by many other airlines like Cathay Pacific on their non-stops to US cities. The TG A340s also had a very large business class which had to be close to full for the routes to be profitable. They never were. When TG suspended JFK and made LAX into a 1-stop they tried to sell their six A340-600s. They failed and the airline is still stuck with them.

The service to Rome is also being axed but London and Frankfurt will get additional flights. The logic behind that move completely baffles me. Emirates, Qatar and Etihad services into BKK have mushroomed in recent years. Not only are their fares cheaper than those offered by TG, their profit generating business class seats and service are years more advanced than TG. Whilst TG can offer non-stop between the capitals, it will still have just one UK and two German destinations. Emirates now flies in to five UK cities, Qatar to four and Etihad at least three. Given the choice of transit at Heathrow or say Doha, I'd take Doha every single time!

TG's management still has a mountain to climb!

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[corky]

The TG flights to London are non-stop whereas the Emirates/Qatar/Etihad flights all require a stop in the Gulf which adds at least 3 hours to the overall travelling time.
I prefer the non stop flights and therefore have a choice of British Airways, Thai or EVA. My first choice is EVA due to the quality of service and the convenient times of flight.
If you want a UK regional airport the KLM or China Airways flights from Bangkok stop at Schiphol in Holland and provide free onward flights to many UK destinations.
I have in the past flown with Emirates and Ethihad and the service is OK in business class but in economy you are treated like cargo and since it's cheap the chance of sitting next to someone ghastly is greatly increased.

[scottish-guy]

I have used EVA three times - but I got fed up with such a long flight, not to mention being handed a Pot Noodle for breakfast - but each to his own.


As I refuse to pay 2.5-3 x the Ecomomy price to travel Business Class, I'm probably one of those ghastly people Corky refers to

[paulfort]

Hi Scottish Guy
I live a few miles from Heathrow, so fortunate in that sense when planning a trip to Thailand, I have previously often used Gulf via Bahrain and Jet via Mumbai on my trips to Thailand, all in economy but my eventual frequent flyer status got me several upgrades in to their business class which was great. However the change of flights eventually got to me (especially via Mumbai which whilst I believe they have no opened a new terminal was not a lot of fun!) so on my last 3 trips and a coming one in October I have used Eva's Premium or Elite service, yes it costs a fair bit more than economy but a lot less than business, the seats/space are fine the food significantly better than economy, the wine within reason flows, the added benefits of easier check in, extra luggage allowance, faster disembarkation all add to it, not to mention no hassle and delays with the changes on route!
I believe worth considering and pretty good value in my book!

[Dodger]

I think we will see a lot of restructuring going on in the Thai airline industry after they failed inspections conducted by the International Civil Aviation Organization earlier this year. As a result, Thailands international flights have been black-listed by several countries including the U.S., China, Japan, etc.

I don't think the slow decline in one particualr Thai airline has anything to do with the model type...it has to do with the fact that the planes were not properly maintained and deemed unsafe for air travel. Personally, I'd rather have the hassle of a connecting flight on a reliable (responsible) airline than fly on a non-stop plane that hasn't been maintained...and it's already apparent that many others feel the same, thus the decline you're seeing now.

Read Here:

http://asia.nikkei.com/Politics-Economy ... s-UN-audit

[fountainhall]

Thailands international flights have been black-listed by several countries including the U.S., China, Japan, etc.

I do believe that's not entirely accurate. Yes, the country's airline regulation infrastructure failed the inspections and continues to do so. That has resulted in the government finally doing what it should have done years ago and sought international assistance to get it up to scratch. When that will be, goodness knows. Some countries like Japan and Korea banned new flights whilst permitting the then existing schedules to continue. Even so, both countries relented and did in fact allow some additional flights.

The U S never banned Thai airlines as evidenced by TG still flying to/from LAX. However, the US authorities have said any new flights to the US will not be permitted unless Thailand can get the required upgraded certificate.

I agree that the purchase of the A340-600's affected mostly the profit projections for the two US routes and had only a marginal affect on the airline as a whole. But that purchase extended even further the different aircraft types in the TG fleet. And that definitely is one of the airline's problems. The different maintenance requirements for so many aircraft models has a direct effect on TG's cost structure. Compare it with Cathay Pacific which has concentrated only on the A330 and the 777 to form the basis of its fleet. CX has not purchased any aircraft other than these two types for more than 17 years (apart from a clutch of B747-400 freighters). Unlike some other airlines, it and its passenger base seem perfectly happy with no A380s and no Dreamliners. But then CX is run as a private business. TG has historically had to bow to the advice of corrupt politicians and civil servants!

[Dodger]

All said, Thailand has taken a major hit for not maintaining their aircrasft to national and international safety standards. This will almost certainly result in declining margins effecting all domestic and international carriers until this problem is rectified. This is not isolated to one particular model aircraft, i.e., A340-600's - it involves all model aircraft...all airlines...domestic and international.

The profitability issues concerning the A340-600's is a totally separate issue.

Personally, I'm more concerned with the "safety" aspects more than anything else. I won't fly on any airline who fails 90% of the safety criteria the inspectors are looking at. I booked Air China for my return to LOS in October versus direct from LAX for that very reason.

[goji]

Buying the "wrong" aircraft and having maintenance issues which damage the reputation of the airline suggests they have incompetent management. If that is correct, then in a properly functioning free market economy, the shareholders would have the CEO and Chairman removed & replaced.
If the best candidate was a foreigner, he would still be appointed. Even British Airways has one in charge.

As long as EVA keep running LHR-BKK I am happy to use them.

[fountainhall]

Buying the "wrong" aircraft and having maintenance issues which damage the reputation of the airline suggests they have incompetent management. If that is correct, then in a properly functioning free market economy, the shareholders would have the CEO and Chairman removed & replaced.
If the best candidate was a foreigner, he would still be appointed. Even British Airways has one in charge.

I can't speak for the management but it's common knowledge that over the years interference at the top political level has forced that management into making decisions which were certainly not in the airline's best commercial interests. The signing of just one contract for several aircraft involves lots and lots of tea money, the more so if it is a type of aircraft new to the airline. But then TG remains a state-owned enterprise with the government holding 51% of the shares.

I'm not sure I'd want Willie Walsh of British Airways running any airline! Under his management, BA's product and service have plunged outrageously. I recently flew across the Atlantic in a new 777. It was the worst journey I have experienced in many years - worse than many low cost carriers. The economy class seat pitch of just 31" is a disgrace. Its business class product has remained more or less unchanged for the past 16 years with the same 8 across seating in very cramped fold-down flat beds and an extremely poor meal service. Plus having to pay very high surcharges to choose a specific seat in advance of 24 hours prior to departure is outrageous and the fees are higher than many budget carriers. ┬г65 each way in business class to BKK - so a total of ┬г260 if you are with a companion, all in addition to the basic ticket price and before fuel and other surcharges are added. (If it was a 747 and you want the upper deck, add ┬г20 each way for that little luxury)! Plus the 777s used on the BKK route are in desperate need of refurbishment!

BA under Walsh has become a leech. Earlier, as the CEO of Aer Lingus, he had reconfigured and downgraded Ireland's flag carrier to another Ryanair low cost operation. So the BA Board knew what they were getting when they appointed him.

All said, Thailand has taken a major hit for not maintaining their aircrasft to national and international safety standards.

They could always do what a very well-regarded Asian airline is rumoured to do - acquire aircraft that are minimally maintained, then sell those aircraft within a few years of acquiring them, since maintenance bills increase over time