Thailand
Thailand: TAA waits for virus ‘phenomenon’ to pass
The head of Thai AirAsia (TAA) does not see the pandemic as a catalyst for new trends, instead considering the disease a phenomenon that requires “temporary extras” to cool down a panic wave for a period of time.
Santisuk Klongchaiya, chief executive of TAA, said at the beginning of the outbreak, the company had a hard time managing uncertainties, such as flight status, partially because of fast-changing rules and regulations for each destination. This resulted in passenger confusion, followed by chaos as droves of people wanted reservation changes.
TAA’s call centre, which normally has 6,000-7,000 calls per day, recorded a new peak of 100,000 incoming calls, exceeding its capacity.
He said leaving middle seats empty and a 14-day quarantine on arrival are acceptable for short period of time, but not practical in the long term for businesses or sustainability.
“The airline business has been faced with uncertainty because of the virus for five months, but high operation costs continue as usual,” said Mr Santisuk. “We have to efficiently manage cash flow as no revenue came in, especially during April when we did not have flights.”
While there were media reports that AirAsia Bhd (based in Malaysia) may lay off its workforce by 30% to streamline operation costs amid the crisis, TAA chose to maintain its fleet size and workforce. Some 30% of domestic flights have resumed.
He said even though forecasts projected aviation businesses would collapse, he rejects these because he expects the tourism industry in Thailand to rebound with strong demand from inbound tourists.
“The key is to increase domestic flights every month and prepare for international flights as soon as Civil Aviation Authority of Thailand allows,” said Mr Santisuk.
TAA has been diversifying services during the downtime, which includes offering in-flight menus for food delivery as well as converting aircraft to carry cargo to China and Hong Kong.
The airline is looking to develop other sources of revenue for the future from logistics services, such as last-mile delivery, and one-stop platforms that provide air tickets and hotel bundles.
Mr Santisuk said domestic flights will return to normalcy in the last quarter, but international flights will take more time, probably by the next Chinese New Year, to fully return.
The Tourism Authority of Thailand revised its foreign arrivals target to 14-16 million for this year from 39.8 million in 2019.
He said the foreign arrivals target should only be 11-12 million, which means the government and airline operators need to boost the domestic market by providing standardised safety and hygiene service to ensure tourist sentiment.
Mr Santisuk said a price war is inevitable in the aviation industry as there is free competition.
“Low-cost airlines with affordable prices will remain,” he said. “Passengers will not be able to book the cheapest prices below marginal cost whenever they want, as they could in the past.”
Mr Santisuk said while he cannot comment about the possibility of mergers as SET regulations prohibit this, in general it is normal for stronger and weaker business to join hands to survive a crisis.
Source: https://www.bangkokpost.com/business/1931568/taa-waits-for-virus-phenomenon-to-pass