Thailand's recent political troubles and disruption have left Thai Airways counting the cost of a drastic drop in tourist numbers and flight cancellations.
The carrier's RPKs and revenues held steady in April despite the Icelandic volcanic eruption that shut down European airspace - resulting in losses of 100 million baht ($3 million) a day - and as anti-government rallies gridlocked Bangkok. The rallies, however, ended after the army moved in against the protesters and the subsequent several-day long violence resulted in over 30 deaths. Tourism, one of the largest contributors to Thailand's economy, suffered as travellers stayed away and several countries issued travel warnings.
Subsequently, Thai's cabin factor in May fell by almost six percentage points to 56.8%, while RPKs were around the same figure, says the airline's new president Piyasvasti Amranand. The carrier also lost about 3 billion baht in revenues during the violence, he adds.
"I thought that fall out from the volcanic ash situation would be quite bad for our business, but that turned out to be negligible compared with what we have faced as a result of the violence," he adds.
"The net result for us is that May this year will turn out to be as bad as May last year, when we were in the middle of the economic downturn. Last year, our premium traffic was badly affected. This time, the economy class was bad. Without the protests, it could have been good for us - as it has been for the last few months."
The carrier's profits for the first quarter of 2010 increased 36% to 10.7 billion baht, and a strong fourth quarter helped Thai turn round losses to post a profit of 7.3 billion baht in 2009.
Despite the setback caused by the violence, Piyasvasti says there are some initial signs of optimism on the horizon. "The good thing is that May and June are traditionally our low months, and that means we were not as badly affected as we could have been. Advance bookings for July appear to be good and we hope things will be back to normal by the fourth quarter, which is our peak period."
That will also allow the carrier to move ahead with plans to become a proper network carrier that serves the region beyond Thailand. "Traditionally, most of our traffic has been for Thailand. So when there is a downturn elsewhere or problems at home, we are badly affected. We are taking steps to promote other destinations beyond Thailand like Bali and Auckland, and increasing our connections to important markets like the USA."
Source: Flight Daily News
