Thursday, December 3, 2009

THAI boss seeks anti-AirAsia alliance

28 November 2009

Thai Airways International (THAI)'s chief executive says Thai-owned carriers should form a united front against foreign rivals, especially the fledging budget carrier AirAsia, whose rapid expansion is seen as a "threat".

"Instead of fighting among ourselves, it would be better for us, Thai airlines, to stick together, co-operate and fight AirAsia, which is the biggest threat," said Piyasvasti Amranand.

"They [AirAsia] are expanding rapidly, taking a lot of passengers away. Their Thai market share has been increasing rapidly."

In his sixth week as president of the flag carrier, the former energy minister said he was advocating "much closer co-operation" among Thai airlines such as privately owned Bangkok Airways.

The co-operation could take several forms, including a code-share agreement, feeding passengers between airlines, consolidating networks and avoiding "unnecessary" competition, he said.

But Dr Piyasvasti's view, that AirAsia is a common threat to Thai airlines, surprised Tassapon Bijleveld, chief executive of Thai AirAsia, the sister carrier of Southeast Asia's largest low-cost carrier group based in Malaysia.

"Why are they seeing us in that light? They should see us complementing them, by bringing passengers from Asean into Thailand and feeding them to Thai airlines and THAI through its Bangkok hub," he told the Bangkok Post.

Mr Tassapon added that AirAsia and THAI served different markets, with the former targeting budget-conscious travellers and the latter those seeking full services. "It is fair to say that THAI should be competing with legacy carriers such as Singapore Airlines, Cathay Pacific and Emirates, not us," he said.

Mr Tassapon asked why entities with foreign ownership, like Thai AirAsia - which is 49% owned by Malaysia's AirAsia Bhd - face discrimination.

"Do we believe in free trade and fair competition in this country?"

AirAsia's extraordinary growth has raised considerable concern among airlines, at least in Southeast Asia.

Marketed under the slogan "Now Everyone can Fly", AirAsia has now flown more than 75 million passengers and is linking cities across Asia-Pacific.

In just seven years, the airline has grown from a fleet of two aircraft with one destination and a staff of 250 to a fleet of more than 80 aircraft with 113 routes to almost 60 destinations across Asia-Pacific and a staff of 6,500.

The airline's low-cost long-haul affiliate, known as AirAsia X, also flies from its Kuala Lumpur hub to Australia, northern China, Taiwan, the UK and, most recently, the United Arab Emirates.

THAI, which will celebrate its 50th anniversary next year, has a fleet of 88 aircraft, which transports nearly 20 million passengers a year to 74 destinations, and employs 26,000 workers.

Industry sources said Dr Piyasvasti brought the issue of co-operation among Thai airlines to the public following a recent meeting with Bangkok Airways president Puttipong Prasarttong-Osoth, in which co-operation between the two carriers was discussed, without concrete agreement on the matter being reached.

Bangkok Post

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