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Mr. Somchainuk
Engtrakul, Acting President, Thai Airways International Public Company
Limited, today held a press conference to announce measures in response
to the effects on aviation industry worldwide following the terrorist
attacks in the U.S. Mr. Tasnai Sudasna na Ayudhaya, THAI's Executive
Vice President, Commercial, together with Mr. Vasing Kittikul, THAI's
Vice President, Sales and Distribution, also conducted a briefing on
THAI's commercial strategies and operations.
Mr. Somchainuk Engtrakul said that following the terrorist attacks in
the U.S. on 11th September, THAI's Management met to discuss possible
actions, which may be taken in response to the effects, with the
following results:
1. Effects between 11-30 September THAI cancelled three of its flights
to Los Angeles. As a result, THAI experienced a reduction of 218 million
Baht in total revenue from transportation in September 2001.
2. Effects on the operations during the first six months (October
2001-March 2002) of the new fiscal year 2001/02 Reduction in passengers
traffic on the following routes:
European route - 3 per cent
American route - 16 per cent
Asian route - 11 per cent
There is also a 7 per cent reduction in the overall freight capacity,
resulting in a 10 per cent reduction of the overall transportation
revenue.
3. Re-routing of flights
The re-routing of THAI flights to European destinations to avoid flying
over Afganistan has resulted in an overall annual increase in fuel
expenses, aircraft maintenance and navigation services. In addition,
there is also an increase in the annual aircraft insurance, resulting in
an increase of 1.2 per cent overall annual expenditure.
THAI now operates into middle and northern Europe using the route
Bangkok-China-Kazakhstan-Russia.
The measures established by THAI in response to the effects are as
follows:
1. Special Security Arrangement
THAI has increased special security measures on all THAI flights
departing from Bangkok and all stations to which THAI operates. THAI is
working in compliance with the new security regulations and procedures
set by the Federal Aviation Administration (FAA) and considering
measures to increase security for pilots in the cockpit.
2. Economic measures
2.1 THAI has made adjustment on flights with low passenger demand, for
example between Bangkok and Colombo, compensating with those of high
passenger demand, for example between Bangkok and China. THAI may also
reduce some of the uneconomical domestic flights in order to help reduce
cost. THAI hopes that with these adjustments THAI's revenue for the new
fiscal year will not be less than year 2000/01.
2.2 THAI has introduced several cost cutting programs for the 2001/02
fiscal year to help reduce costs by 2,000 million baht per year. These
programs include revision of investment in aircraft spare parts, delay
in employment and inflight products investments as well as the
non-revenue generating investments. THAI also reduced operational cost
such as delaying building and office non-essential maintenance, as well
as reducing the consumption of electricity and water. THAI will review a
decision to close some of its off-line overseas offices.
Those economic measures will enable THAI to reduce cost by 1.9 per cent.
3. Re-routing of flights
3.1 THAI now operates into northern Europe using the route via
China-Kazakhstan-Russia and into southern Europe using the route via
Mumbai.
3.2 In case of the worse scenario, THAI may consider canceling flights
to Karachi, Lahore, Muscat and Dubai as well as revising flight
operations into Europe and other destinations with low passenger demand.
Mr. Tasnai Sudasna na Ayudhaya, THAI's Executive Vice President, and Mr.
Vasing Kittikul, THAI's Vice President, Sales and Distribution, have
announced commercial strategies during the next six months as follows:
1. Cost cutting programs
1.1 Reduction of flights
Between 1-27 October 2001, THAI has announced a reduction of flights
between Bangkok and Colombo from four to three weekly flights. >From 28th
October, THAI will reduce its flight operations between Bangkok and
Colombo from three to two weekly flights.
1.2 Reduce costs
THAI also reduced cost at overseas offices by cutting transportation and
telephone costs, while the overseas offices have been instructed to
follow up closely on the market trends as well as movements of other
carriers.
2. Incentive travel programs
- THAI's Royal Orchid Holidays in-house tour programs will be used as
one of the tools to boost travel in Thailand on the routes that have
been minimally effected such as Australia, New Zealand, China, Hong
Kong, Taiwan, Korea and Japan.
- THAI is also working closely with the Tourism Authority of Thailand
especially in areas of marketing information to promote travel in
Thailand
- An extension of "Travel in Thailand" program until December this year. |
