Thai Airways debunks reports of pilots' mass resignation

Thailand’s national carrier Thai Airways on Monday (Aug 25) denied reports that scores of pilots suddenly left the company after the airlines’ earnings were hit by competition and high costs.

Executive vice president for operations Athisak Padchuenjai on Monday debunked local media reports, saying it was not true that 200 pilots have resigned. He added that about 30 pilots have left Thai Airways this year, but it has not affected the airline’s operations.

Thai Airways is undergoing restructuring after it posted losses for five consecutive quarters. It has proposed to cut 1,500 jobs this year, and it intends to shed a quarter of its full-time staff by 2018.

The airline had 1,350 pilots as at August this year. About 100 student pilots join the carrier every year, said Athisak.

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Thai Airways bans shark fin from cargo flights

Thai Airways has banned shark fin from its cargo flights as part of a growing global campaign against the popular delicacy in Asia.

The carrier joins a host of other airlines in taking a stand against shark fin, highly prized by many in the region, especially in Hong Kong and China where it is commonly served as a soup at wedding banquets and corporate parties.

"As part of the world community sharing in the great concern for the protection of endangered species and the environment, Thai Airways International has implemented its own official policy to place an embargo on the shipping of shark fin products," the airline said in a statement Tuesday.

Conservationists say booming demand for fins has put pressure on the world's shark populations, prompting calls for measures to restrict their trade.

Thai Airways officially stopped flying shark fin from July 15 but has avoided shipping fins for over a year, according to the statement. The move brings the carrier into line with a number of other Asian airlines including Philippine Airlines, which said in April it had stopped flying shark fin cargoes.

Air New Zealand as well as South Korea's two largest airlines, Korean Air and Asiana, separately announced last year that they would ban shark fins from their cargo flights, a year after Hong Kong's Cathay Pacific also stopped shipping them.

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Thailand delays Suvarnabhumi Airport expansion

Airports of Thailand Public Company Limited (AOT) has postponed its expansion plan of the country's main Suvarnabhumi Airport, as suggested by the army-led National Council for Peace and Order (NCPO).

However, it will increase the capacity of Don Mueang Airport, reported Thai News Agency (TNA).

AOT President Makin Petplai told journalists of the update on Thursday, noting that the NCPO's committee on the examination of government spending has told AOT to review the cost of its second-phase Suvarnabhumi Airport expansion project.

Following this, AOT postponed the project although it was in the process of finding a construction supervisor and staging a bidding contest.

For the time being, Makin acknowledged, AOT is improving Bangkok's Don Mueang Airport to deal with the soaring number of air passengers.

He said that Don Mueang Airport is expected to serve 18 million passengers this year and its improvement should then raise its capacity to more than 30 million passengers annually.

Makin insisted, however, that the second-phase Suvarnabhumi Airport expansion project remains necessary, as the country's main international airport now handles up to 51 million passengers annually, exceeding its original capacity of serving 45 million people yearly.

According to the AOT president, AOT earlier planned to start the expansion of the Suvarnabhumi Airport in December and to open the expanded section in late 2016 or early 2017 with the combined capacity of handling 60 million international passengers annually.

The AOT president projected that the number of air passengers at Thai airports under AOT's supervision should grow by 2-3 per cent this year, compared with 9.5 per cent last year, while that at other airports in Asia Pacific should increase by 6.5 per cent on average.

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Scoot, Nok Airlines agree on structure of joint venture

Scoot and Nok Airlines are taking one key step forward in their plans to set up NokScoot, a low-cost carrier based in Bangkok.

Singapore Airlines said in a statement on Thursday that the two partners have agreed on the final structure of the joint-venture airline. This follows the memorandum of understanding with Nok Airlines which was signed in December 2013.

Scoot is a wholly-owned subsidiary of Singapore Airlines.

Scoot and Nok Air will ultimately each hold a 49-per cent shareholding of the joint venture company.

The final 2 per cent will be held by Pueannammitr Co, a company formed by the management of Nok Air.

The partners plan to set up the joint venture airline by way of acquiring an existing company, Pete Air Co, which holds an air operator's licence.

The joint venture company will be subsequently renamed NokScoot Airlines Co.

The partners have agreed to invest an initial aggregate amount of S$80 million in the joint venture.

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Singapore Airlines: Flights to Bangkok not affected

The Republic's national carrier, Singapore Airlines, said on Friday (May 23) that its flights to troubled Bangkok are operating as scheduled, but that it will continue to waive fees for refunds or rerouted trips for customers flying in or out of the Thai capital.

"Our Bangkok flights are currently operating as scheduled," the spokesperson told Channel NewsAsia, adding that "generally demand has been affected for flights to and from Bangkok in recent months".

Singapore Airlines currently operates 35 weekly services to Bangkok, which is at the epicentre of political turmoil which culminated on a military coup on Thursday.

"We have issued an advisory on our website, which states that we will be waiving administrative fees/penalties for refunds, rebooking or rerouting, for customers holding confirmed tickets issued on or before May 19, 2014, for travel to and from Bangkok, on or before May 31 2014. This also applies to redemption tickets," Singapore Airlines added.

The Ministry of Foreign Affairs on Friday issued a Travel Notice calling on Singaporeans to "seriously reconsider visiting Thailand at the moment" and for those already in the country to avoid protest sites and exercise "a high degree of caution".

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Emerging Asian carriers make presence felt with plane deals

Emerging Asian carriers made their presence felt at a major airshow on Thursday with multibillion-dollar deals that underscored the region's importance as the growth driver of global aviation.

Four relatively small Asian carriers already had a combined order book of more than $11 billion halfway into the six-day Singapore Airshow, with smaller planes as their preference.

Airline executives said many smaller cities in Asia remain underserved despite the explosive growth in budget air travel, and they will use the new planes to connect such destinations to metropolitan centres.

Asia's expanding middle class is driving demand, said Song Seng Wun, regional economist with Malaysian bank CIMB.

"It's really a function of regional economies experiencing spending power of the rising middle class which benefited from so many years of steady growth," Song told AFP.

In the latest deal, Indian carrier Air Costa on Thursday ordered 50 E-Jets E2 aircraft, which can seat 70-130 passengers, from Brazilian manufacturer Embraer worth $2.94 billion.

The deal with Air Costa, which began operations only four months ago, also includes purchase rights for 50 more of the aircraft, both companies announced at the show.

With the orders, Air Costa will become the first customer of the E-Jet E2 in the Indian market when it takes delivery of the first plane in 2018.

Thai budget carrier Nok Air also on Thursday firmed up orders for two Q400 86-seater planes from Canada's Bombardier worth $63 million.

Nok Air indicated it may buy six more depending on its needs.

The Singapore Airshow began Tuesday with an order by Vietnamese budget carrier VietJetAir for 63 Airbus A320 jets worth $6.4 billion.

The deal also covered rights to acquire or lease 38 more A320s, potentially boosting VietJetAir's current fleet of 11 A320s tenfold.

The Vietnamese airline, founded only in 2011, plies domestic routes as well as services to Bangkok, Seoul and Kunming in China with its current fleet of leased planes.

In another deal, US aicraft maker Boeing on Wednesday announced that Nok Air had committed to buy 15 B737s worth $1.45 billion.

Bangkok Airways, which brands itself as a "boutique carrier" that flies to selected tourist destinations, on Wednesday also signed up to buy six 72-600s from European plane-maker ATR in a deal worth $150 million.

Air Costa executives said they would use the E-Jets E2 aircraft from Embraer to serve smaller Indian cities.

"Our focus has been the tier-two and tier-three cities in India," Air Costa chief financial officer Vivek Choudhary told a media briefing Thursday.

"Our philosophy is that we believe that 70 per cent of the population, of the huge 1.2 billion population in India, still reside in these non-metros," he added.

"Basically we are linking the metros to the smaller cities."

Choudhary said the carrier expects the air transport sector in India to grow dramatically in the next 15 to 20 years.

"The huge size of the middle class in India and the profitability levels that are going up adds to the demand in air travel," he added.

Nok Air chief executive Patee Sarasin said his airline was looking to expand into Myanmar following the opening up of the formerly army-ruled state.

"I think Myanmar has really stepped up," Patee told reporters after firming up the two jet orders with Bombardier.

"We think it's a beautiful country and we see a high potential that Myanmar will grow very fast," he said.

"I am sure within the next few years we are going to see Myanmar growing as fast as Vietnam."

Economist Song said such new markets were an "added bonus" as even without them demand for travel in Asia was robust.

"Frontier markets are an added bonus," he said. "Even without the likes of Myanmar, demand continues to grow."

Airbus, Boeing and Embraer -- in their 20-year forecasts for the industry -- all said the Asia Pacific is the key market to enter because of the burgeoning middle class.

Embraer's president and chief executive Paulo Cesar Silva said passenger traffic in the region "is mostly composed by secondary markets with low and medium demand densities of up to 300 passengers daily each way".

"Some 60 per cent of those markets are not served nonstop, and around half of all markets served do not allow for same day return travel," he said.

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Thailand's Nok Air to buy 15 B737s worth US$1.45b

Thai budget carrier Nok Air on Wednesday committed to buy 15 B737s from Boeing worth $1.45 billion.

The commitment, announced at the Singapore Airshow, is for eight next-generation 737-800s and seven 737 MAX 8s, Nok Air and Boeing said.

"This commitment is a major step in our growth strategy," Nok Air chief executive Patee Sarasin said in a statement.

"The 737 is the backbone of our fleet and will continue to be in the future."

Speaking at a news conference, Patee said that his airline would order more planes in the future but would take a more cautious approach compared to other low-cost carriers.

"There's going to be more aircraft coming in," he said.

"We have a lot of competitors who love to buy 200 or 300 aircraft," he said, citing Tony Fernandes, the chief executive of Malaysian budget carrier AirAsia.

"He bought so many aircraft, and currently he doesn't know where to fly to. Our strategy will not be the same as Tony Fernandes," he added.

"We actually plan our strategy in terms of destinations we fly to first, before we order our aircraft."

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SIA to cancel 19 flights to Bangkok due to lower demand

Singapore Airlines will cancel 19 flights to the Thai capital later this month due to lower demand.

The move is believed to be due to the current political turmoil in Bangkok.

The cancellations will be in force for more than a month - from January 14 to February 25.

SIA said it has informed affected customers, who will either be given refunds or put on other flights.

Travel agencies are also seeing fewer travellers to Bangkok.

Chan Brothers said there were 20 per cent fewer customers for the route last month, compared with the same period last year.

But it is still seeing bookings in the new year from travellers who are adopting a wait-and-see approach.

Jane Chang, manager of Marketing and Communications at Chan Brothers, said: "We have close to 100 travellers who will be departing for Bangkok during the Chinese New Year week despite the protests and all.

"Enquiries that will come in from our travellers are whether or not it's safe to travel to Bangkok. And what we inform (them) is that we're monitoring the situation as it is, because it's hard to tell what's going to happen during Chinese New Year right now."

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Tigerair, Scoot in JVs to set up Taiwan, Thai budget airlines

Taiwan's China Airlines and Singapore's Tiger Airways plan to set up a Taiwan-based budget carrier.

This will allow Taiwan's biggest airline to tap into Asia's low-cost aviation market.

Tigerair, in which Singapore Airlines owns about a third stake, will also extend its presence into the new and largely untapped markets of Taiwan, Japan, and Korea.

In a media release on Monday, Tiger said the new carrier will operate under the Tigerair brand and be independently managed. Tigerair's website will be the main sales and distribution platform.

Tigerair will initially hold 10 per cent of the start-up, while China Airlines will hold a 90 per cent stake.

The start-up will have a registered capital of T$2 billion (about S$85 million).

The partner carriers will be submitting applications for regulatory approvals.

Tiger Airways also announced an agreement with Indian budget carrier SpiceJet, allowing both to connect passengers on each other's flights.

Tigerair currently flies to Hyderabad in India and the agreement with SpiceJet will allow the two to connect 14 Indian cities from there.

Tiger Airways and Scoot -- the long-haul, low-cost unit of Singapore Airlines -- also agreed to work together on joint operations, and sales and marketing on parallel routes.

In a separate announcement, Scoot said the company plans to establish a new Bangkok-based low-cost carrier with Thailand's Nok Airlines.

The new airline will be named NokScoot and will be based at Don Mueang International Airport. It will operate wide-body aircraft on medium and long-haul international routes.

Nok will have up to a 51 per cent stake in the new carrier and Scoot will hold a 49 per cent stake.

The initial investment will be THB2 billion (about S$80 million).

The establishment of the new airline is subject to regulatory approvals.

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Competition heats up among budget airlines in Thailand

Thailand: The market for budget airlines in Thailand is set to become even more competitive.

Thai Lion Air and VietJet Air are muscling in, starting next month.

VietJet Air will launch its first flights between Thailand and Vietnam in the first quarter of 2014, while Thai Lion Air will start twice-daily flights to Chiang Mai and Jakarta and a once-daily flight to Kuala Lumpur in December.

Analysts said some routes may become over-serviced, making deeper price-cutting inevitable.

Thailand's already-thriving Don Mueang Airport will get a new operator in December.

Indonesia's largest airline Lion Air will join the competition, going head-to-head with other low-cost carriers (LCCs), with an aim to capture an initial 10 per cent of the market.

Thai Lion Air will also be the first airline in Thailand to operate the B737-900 ERs.

Voravuth Vongkositkul, director of flight operations at Thai Lion Air, said: "We have a lot of competitors here in Thailand. I cannot say that we will profit but we forecast that in the next two to three years, we will get everything back.

"We also think of expansion or using another hub, in the second half, we could consider Chiang Mai or Hat Yai."

Lion Air is the latest airline to enter Thailand's aviation market and Thai Lion Air will be commencing twice-daily flights from Bangkok to Chiang Mai in December. And to stand out from other low-cost players, Thai Lion Air is offering its passengers a free 15-kilogramme baggage allowance. Analysts said this just makes the competition even stiffer for incumbents such as Thai Air Asia and Nok Air.

Brendan Sobie, chief analyst (Southeast Asia) at the Centre for Aviation, said: "The LCC penetration rate in the international Thailand traffic is about 20 per cent, which means about 20 per cent of the international seats to and from Thailand are accounted for by LCCs. If you compare that to Singapore, the number is about 31 per cent, and in Malaysia, that number is 50 per cent.

"So I think the major LCC groups see that there are potential opportunities to go into the market. It is unknown whether so many new airlines can be supported, given that environment. So we could potentially see some consolidation in the medium- to long run. "

What carriers lose on lower prices, they hope to make up by carrying more passengers in a low-cost market that accounts for just 20 percent of in- and out-bound travel.

In 2012, Jetstar Asia served two million passengers in the Singapore-to-Bangkok market alone.

Barathan Pasupathi, CEO of Jetstar Asia Airways, said: "The Thai market's capacity has actually grown under 10 per cent year-on-year while Jetstar Asia has grown its capacity by 30 per cent at the same time.

"Today, we have 31 alliances and our alliance partners transfer feed into our Singapore hub and fill up seats from Singapore to Bangkok. Likewise, Bangkok being another important hub, our partner alliances actually fly into Bangkok and they fill up the leg between Bangkok to Singapore."

But it is the growing traffic from China and the potential traffic from its newly-opened-up neighbour that offer the most potential.

Paul Ng, global head of aviation at Stephenson Harwood, said: "Thailand has an Open Skies Treaty with China so it is a springboard into Southern China like Guangzhou and the other southern states. The other is Thailand is intimately associated with one of the fastest and newest markets in ASEAN, Myanmar."

That is a market with about 65 million people, and one that budget carriers will have their eyes on - especially if Thai visa restrictions are eased on Myanmarese travellers next year.

Mr Sobie said: "There is no denying that LCC opportunities in Southeast Asia are huge. They have been huge for the last 10 years.

"The rate of penetration for LCCs in Southeast Asia has gone from zero to over 50 per cent of the market. And there are still opportunities because you have the emerging middle class, you have growth and discretionary incomes, and you have frontier markets like Vietnam and Myanmar that are just starting to emerge."

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Japan travel agency forming Thailand-based airline

One of Japan's biggest travel agencies said on Tuesday it would set up a charter airline based in the Thai capital Bangkok as demand for air travel in Asia soars.

H.I.S. said its Asia Pacific Airlines would begin operating flights in the summer, connecting Bangkok to locations across East Asia, including China, Japan and South Korea, a company official said.

The carrier would initially operate two 767 mid-sized planes before expanding its fleet to 10 aircraft within several years, it said.

"As demand for international flights is expected to jump in Asia, we want to secure our own aircraft so that we can offer services to both our current and new customers flexibly," the official said.

The travel giant offered few other details about its new airline.

About 18 million people used H.I.S. last year and it had 446 billion yen ($5.4 billion) in turnover, according to the company's financial results.

Asia Pacific Airlines will be owned 49 percent by H.I.S., with 39 percent held by its Thai unit H.I.S. Tours Co. and the remaining 12 percent held by Thai hotel owner Panlert Baiyoke, according to a statement.

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Air travel in Asia is a hot market now and everyone wants a pie of it. Hopefully such competition will make traveling even more affordable but safety regulations must not be compromised.