TG pulls three domestic services

Thai Airways International will transfer to Nok Air three loss-ridden domestic services – Phitsanulok, Ubon Ratchathani and Mae Hong Son – effective 1 March, 2010. THAI estimates it lost Bt211 million a year flying to these three northern towns.

Passenger tickets pre-sold on these three services will be transferred to Nok Air ‘s booking system. THAI’s overseas offices will continue to sell travel to the three cities through a passenger sales agreement with Nok Air.

THAI president, Piyasvasti Amranand, said Nok Air would provide the same frequencies and operate to the same standards of maintenance and cockpit crew procedures.

THAI board chairman, Ampon Kittiampon,  gave an assurance  at the close of today’s board meeting  that if Nok Air failed to operate the routes properly, THAI would take them back in order to protect the general public and residents in the three destinations.

“These routes are not profitable for THAI.  If we continue we will need to increase fares by 20% , just to survive. Nok Air can adapt and refit aircraft to make a profit. It can put more seats in the cabins and cut frills.”

THAI would like to increase its share in Nok Air from 38% to 45% and there is even discussion on the airline’s name  and whether it should be changed to reflect its strategic partners.

However, there are still concerns as Nok Air has a history of running a service and then withdrawing with little or no notice. It withdrew from Loei, leaving the Northeast town without flights during the peak season of 2007.

Politicians linked to the three towns will probably oppose the decision. Mae Hong Son’s chamber of commerce has repeatedly criticised THAI whenever it considered suspending services to the far northwest town.

Pressure groups will require a water-tight commitment from Nok Air on flight schedules, or the airline will face a storm of protests from hotels, travel executives and government officials who have been using THAI in the past.  Airline executives often complain that politicians fly free and it causes substantial losses for the airline.

The airline president claims a study of its domestic routes during the past 10 years, particularly on secondary routes, showed they were unprofitable. However, some unprofitable routes provide a strong network contribution for connecting international services.

Over the past five years, losses were incurred on flights to Phitsanulok – Bt86.3 million a year, Ubon Ratchathani Bt74.9 million, and to Mae Hong Son Bt49.9 million.

THAI currently has three daily flights from Bangkok to Ubon Ratchathani, using a Boeing 737-400. Mae Hong Son, is served by two daily flights friom Chiang Mai, using the 70-seat ATR -72. Phitsanulok has two daily services from Bangkok, using a Boeing 737-400.