Reaching for the sky

he chairman of Thai Airways International is optimistic about the airline’s prospects, despite the
worldwide slump in travel in the wake of the terrorist attacks on the US.
Virabongsa Ramangkura acknowledges the increased pressure that is now on the state-owned carrier. “The government expects tourism and air transport to prevent the trade and current account balances from declining as they have in overseas countries,” he says.
The company is one of the top three in South East Asia and one of the world’s most highly-rated international operators.
It recently topped Holiday Asia’s poll of favourite airlines, ahead of the likes of Singapore Airlines and Cathay Pacific.

Mr Virabongsa says the airline has tremendous potential. “Our staff are as good as any other airline and Thailand is
a potential regional aviation hub.
“Thai Airways enjoys full financial support from a government that is determined to develop it as a leading airline,” he says.
The airline, which has seen 23 per cent growth this year, is an important revenue earner for the government and plays a key role in the country’s tourism industry. It is determined not to let the current downturn in worldwide travel deter it from lifting its global profile. New routes have been opened and a promotional campaign launched.

As part of its new winter schedule, it has introduced regular flights for the first time between Bangkok and Mumbai (Bombay), using 317-seat Airbus 330 aircraft. The aim is to capture a slice of the lucrative business market generated by India’s high economic growth rate. Mumbai receives nearly half the nine million air passengers who travel annually to India. Thai Airways also flies to Delhi and Calcutta.
With Air India, Lufthansa and Silk Air, Thai Airways has entered into a code sharing agreement for flights between Mumbai-Bangkok; Mumbai-Delhi-Frankfurt and Kochi-Singapore.
The airline has also announced plans to increase flights to Europe in a bid to capitalise on tourists seeking warmer destinations during the winter. Extra flights have been laid on to Paris, Rome, Zurich, Munich and Copenhagen.

It also plans to start a service to Chengdu in China, as well as increase flights to Perth, Osaka, Guangzhou, Jakarta and Hanoi, as well as to local tourist destinations Chiang Mai and Krabi. This is a bold response to the withdrawal of services by some airlines since September 11. Nevertheless, Thai Airways suspended its flights to Lahore and Karachi in Pakistan.
The ‘Discover Thailand 2002’ and ‘Eurng Luang Nationwide Package Tour’ campaigns promoted by Thai Airways to attract more tourists from China, Europe and Australia, aim to boost the tourism business by 10 per cent by pulling in both foreigners and locals. Mr Virabongsa points out that Thailand is a safe country without religious or terrorist activities.

New routes have been opened and a promotional campaign launched

Mr Virabongsa, an economics expert who steered the Bangkok Expressway to fruition, has a difficult task ahead to keep the airline’s operating results from sinking further into the red.
Fortunately, he is close to the prime minister and has strong backing from other politicians, so even if Thai Airways fails to find buyers for a new share issue, its stability is not threatened. But privatisation of the airline will be postponed until after the firm’s debt-to-equity ratio improves.

Some analysts say that Thai Airways may issue debentures instead of trading additional shares on the stock exchange. Another option is for the national airline to sell a stake to Krung Thai Bank, as the state bank has expressed an interest in becoming a shareholder.
In the meantime, the airline will review its plans to buy new aircraft and revamp
its five-year operation plan, particularly for marketing and finance. There are no plans to reduce the number of employees but neither are there any plans to recruit new personnel.