THAI plans big push in 2nd half
Thai Airways International Plc will next week start executing an aggressive second-half business plan to achieve its full-year targets for sales growth of 11 per cent and net profit of Bt6 billion amid increasingly fierce competition, particularly from th
The national carrier has projected 2013 sales at Bt224 billion, but its performance in the second quarter was worse than expected, compared to the same quarter last year. It was hit by the strengthening of the baht and the weakening of the Japanese yen and euro. Especially the yen, which plunged 17-20 per cent, Chokchai Panyayong, executive vice president for commercial operations, said yesterday.
However, first-half results were still positive and the airline was confident it would achieve its business metrics by the end of this year, despite the projection for the overall industry to expand by only 3-3.5 per cent.
A special commercial executive committee, chaired by THAI president Sorajak Kasemsuvan, has been set up to help monitor the fast-changing industry and gather information to strengthen its strategy. It will also touch bases with THAI offices worldwide every week via Skype to make it even easier to make decisions on urgent matters.
Chokchai, who moved to this post on June 24 from the strategy and business development division, will spearhead the team to boost sales by 10-15 per cent this half year to ensure the airline meets its sales goals for the entire year.
THAI’s board hopes he leverages his long years of experience to strengthen the airline’s business at a time when the world’s economy from Europe to Asia is in a state of flux. Especially foreign currency fluctuation poses a major risk in the rest of the year. The carrier will take delivery of 17 new aircraft and they must be put to best use.
It does business in 50 currencies, but mainly the baht (30 per cent), yen (20 per cent), euro (30 per cent) and US dollar (10 per cent).
The focus would be more on fast-growing regional markets offering higher margins, particularly China and Japan. The two countries are still growing and demand there for air travel will be on the rise. Russia is also on the radar screen.
The semi-annual plan calls for an increase in flight frequency and seat capacity as well as new routes to the two markets. Japan is expected to enjoy a travel boom after it recently waived visas for up to 15 days for Thai tourists. This will force THAI to compete head-on with low-cost carriers, especially long-haul AirAsia X, which plans to serve Japan from Bangkok.
Even though Europe is in dire financial straits and its economic prospects are blurry, the market is still important and the airline will continue focusing on it to maintain its passenger base.
Europe and Asia contribute 45 per cent of sales each, while 10 per cent comes from the domestic market. In the future, Asia is expected to increase to 50 per cent.
THAI has 91 aircraft in its fleet, with 58 more arriving in 2017.
