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Thailand Recovery

Thailand's tales of recovery

Stéphane Hanot, eTN Staff Writer  Dec 28, 2008

Thailand authorities’ vision of collapsing tourism might be finally too gloomy. It seems that recovery from long-haul markets already started and is getting steadier than expected. Thai Airways and XL Airways set two examples of Thailand’s recovery.

Beside the launching of “Smiling Thailand” campaign by the new Thai government of Abhisit Vejjajivato to boost foreign confidence into the kingdom, aviation and tourism authorities start to get their smile back by looking at the evolution of the demand.

“There is more confidence about us as the government seems to be stable for the time being and is really committed to have the situation back to normal. The fact that our Prime Minister apologizes for the recent inconvenience caused by airports closure and his promise to b sure that this will not happen again are positive and encouraging signs,” said Natwut Amornvivat, president of Thailand’s Convention and Exhibition Bureau (TCEB).

And it does not look as bad as expected- at least for this Christmas holiday. Heavy last minute discounts helped to fill up hotels again with pssengers flying also on last-minute discounted packages. “We even heard from Thai Airways that booking from Europe are getting back to normal,” added Amornvivat.

This is in fact a pleasant surprise. “We start indeed to see a recovery in demand from our long-haul markets. We already took consequence of it by reinstating 90 percent of our winter timetable, being even at 95 percent of our full program on our long-haul network,” said Pandit Chanapai, executive vice president Commercial at Thai Airways International. Europe and Australia are back to their full schedules. Just Johannesburg is now under review as the route is underperforming.

However, Chanapai already thinks of expansion: Thai Airways will strengthen its presence in India from February, doubling its daily flights to New Delhi and Mumbai and being back to daily flights to Kolkata and Chennai. As the demand remains sustained from the Middle East, Chanapai is looking to boost capacity by the summer. Thai Airways will offer a double daily frequency to Dubai, set up four non-stop weekly flights to Kuwait (instead of via Dubai).

“We look in priority to open a new route with Jeddah, once diplomatic relations are re-established with Saudi Arabia and we consider also seriously to add Amman and Abu Dhabi,” added Chanapai.

The markets still remain depressed to Korea, Japan, China and some neighbouring countries of ASEAN such as Singapore. “We will adjust accordingly capacities. However, we also think to provide more intra-orient flights within a time frame of six hours flight. I believe we could operate more flights to destinations beyond China as well as adding more capacities between Japan or Korea and Thailand via Manila or Taipei,” he added.

Chanapai estimates that Bangkok’s airports closure translated by a loss of Baht 500 million per day. The airline is now targeting a load factor of 70 percent for the whole 2008 –compared to 77 percent in 2007- and of 73 percent for 2009.

“We completely review our growth strategy. We do not target only revenues anymore. We look at cost reduction and will drive our development from this point of view. It means for example, that we will just put the right number of aircraft to stick to the demand. If we have to reduce capacities and retire aircraft, we will now do it. Even if we ultimately have to look also at ways to reduce our working force. But it would be the last solution to remain competitive,” added Chanapai.

Thai Airways is still lucky to rely on a relatively solid overseas market. This is also the same reasons that gave enough confidence for French holiday-airline XL Airways to start new regular flights from Brussels and Paris to Phuket. The first flights touched down just prior to Christmas and French tour operators programming those flights are exhilarated.

“We see demand for Thailand picking up again following a return to normality in Thailand. We have again a lot of enquiries for the Kingdom from France,” said Stéphane Gréhalle, from Toorism, a travel agency in Paris.

“Flights to Phuket are full over the holiday season and XL Airways has already announced to have this flights all-year around,” said Thierry Maillet, sales director for Tour Operator Best Tours.

XL Airways got the support from Tourism Authority of Thailand (TAT), which helped to promote the new flights at various travel shows in Europe. “It is an excellent way to see how we can cooperate with some of the biggest names of the travel industry in Europe such as Club med, Thomas Cook, Jet Voyage, Nouvelles Frontières or Look Voyages,” said TAT Governor Phornsiri Manoharn.

Look Voyages –which represents some 100 passengers on the weekly frequency Paris-Phuket- has even rent out for the season Apsaras Beach Resort and Spa in Khao Lak, a first for the four-star property hotel. “It will help us to boost our occupancy to over 70 percent and we are delighted,” said a confident Kantima Sanglee, deputy managing director of the property.

Thailand's tales of recovery
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