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Asia led the way for Thai Airways in 2012 and also will in 2013

Airbus forecasts that the Asia-Pacific will dominate the world’s demand for aircraft within the next 20 years, with needs expected to skyrocket to 10,440 jets from today’s 4,300, thanks to growing air travel in the region.

Bahar Karaman

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Thai’s focus on regional markets helped drive the improvement in load factors and profitability compared to its disappointing performance in 2011.

International passenger revenues within the Asia region increased by 13% in 2012 to THB65.74 billion (USD2.21 billion) while revenues in intercontinental markets (includes Australia and New Zealand) dropped by 4% to THB53.88 billion (USD1.18 billion). Domestic revenues were up 6% to THB14.69 billion (USD494 million).

Airbus forecasts that the Asia-Pacific will dominate the world’s demand for aircraft within the next 20 years, with needs expected to skyrocket to 10,440 jets from today’s 4,300, thanks to growing air travel in the region.

Asia-Pacific will dominate the world’s demand for aircraft within the next 20 years

Airbus forecasts that the Asia-Pacific will dominate the world’s demand for aircraft within the next 20 years, with needs expected to skyrocket to 10,440 jets from today’s 4,300, thanks to growing air travel in the region

John Leahy, Airbus’ Chief Operating Customer Officer, said in Singapore on Monday that being valued at US$1.6 trillion, the 10,440 jets represent 35 per cent of global deliveries expected over the next two decades and the aircraft value embodies 40 per cent of the global market. Among the number of predicted fleets, 3,800 would be wide-body and fuel-efficient aircrafts.

“The Asia-Pacific market is where the action will be in the air transport market over the next 20 years. Growing economies, bigger cities and increasing wealth will see more people flying, driving the need for larger and more efficient aircraft,” John said in a statement sent to The Jakarta Post on Tuesday.

Read more: Asia-Pacific to lead global aircraft market – Business – Thailand Business News

Thai Airways mainline reported a 5.5ppt improvement in load factors on regional international routes to 75.7% on a 17% increase in RPKs.

Thai Smile reported an 82.3% load factor on its only international route, Bangkok-Macau.

Thai Airways mainline also saw a 4.5ppt improvement in load factor on domestic routes to 76.7% as RPKs increased by 4% while Thai Smile recorded an 81.6% domestic load factor in its first year of operation.

Australia also performed well, with Thai’s load factor surging 10.5ppt to 77.7% on a 13% increase in RPKs. Thai will likely expand further in Australia, where it serves four destinations with 39 weekly return flights, as part of its increased focus on the Asia-Pacific region.

Thai is well positioned to take advantage of rapid growth in the Australia-Asia market but this is also a market being aggressively targeted by Qantas and the new Singapore Airlines-Virgin Australia combination. Both Qantas and its partner Emirates, which is by far the largest non-Asian carrier at Bangkok, serve Bangkok from Sydney.

The airline made an impressive passenger load factor (PLF) in 2012 – the highest in five years – at an average utilisation of 76.6 per cent, representing an increase from 70.4 per cent in the preceding year.

PLF is a measure to calculate the average occupancy on various routes of an airline.   Of THAI’s Bt213.53 billion revenue last year, Bt8.248 billion was from Nok Air’s operations, Bt1.584 billion from profit in purchasing the Nok Air business, and Bt10.042 billion from operating revenue.
Read more: Thai Airways shows profit over Bt6 billion ($200mln) 
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Thai impacted by economic downturn in Europe

On European routes Thai managed to improve its load factor by 5.6ppt to 77.4%. But RPKs were up only 2% and Thai had to rely heavily on promotions to keep its flights to Europe full. Thai has warned that it expects continued weak travel demand to and from Europe. In a Jan-2013 presentation, Thai said yields on European flights were below target in 2012 and it continues to offer promotions for travel over the next three to six months.

Thai relies heavily on inbound traffic, making it more exposed to the economic downturn in Europe than other Asian carries. The weak economic conditions in Europe were bad timing for Thai in that the carrier took delivery in 2012 of its first batch of three A380s. After initially operating the A380 on regional routes, Thai began operating its new flagship aircraft on Bangkok-Frankfurt in Dec-2012 after taking delivery of its second and third aircraft.

Thai Airways will take delivery of its last three A380s in 2013, with one aircraft slated to come in Mar-2013, one in Oct-2013 and one in Nov-2013. Thai plans to use the fourth aircraft to begin A380 operations on the Bangkok-Paris route from 30-Mar-2013. It will continue to use the A380 to Hong Kong and Tokyo, illustrating the importance of regional routes. See related article: Malaysia Airlines and Thai Airways focus on Europe rather than Australia with A380s Read More

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