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THAI looking to set up wholly-owned LCC

Apparently frustrated over the lack of progress in its deal with Tiger Airways, thanks to delays in receiving the necessary government approvals, and with its inability to take a controlling stake in Nok Air, Thai Airways International (THAI) is now looking to set up its own wholly-owned low cost carrier (LCC).

Saturday 28 May 2011, 03:01AM


The new airline, which for the moment is being called Thai Wings, will initially use five Boeing 737s leased from THAI, along with another two narrow-bodied aircraft from elsewhere, all in economy-only configuration.

Thai Wings would fly out of Suvarnabhumi Airport, mostly on domestic routes, and would be ready to take off as early as April next year.

THAI appears not to have given up altogether on its plans for a joint venture with Singapore’s Tiger Airways, but opposition from the Minister of Transport has severely delayed the start of that venture.

An MOU between the two airlines was signed in August last year with the aim of getting off the ground within six months. That date was pushed back to April, and again to July this year.

With the Thai Tiger venture being a political hot potato, and the government now acting in a caretaker capacity until the July 3 elections, the June date looks decidedly unlikely.

THAI chairman, Ampon Kittiampon, has not given up on the Tiger deal yet – at least not in public. At a recent press conference, he said that THAI could end up with both Thai Wings and Thai Tiger.

“If the next minister decides to be kind and approve the project, we will … go ahead with both, side-by-side,” he said, explaining that they could serve different market segments: Thai Wings being a budget airline with basic in-flight services, and Thai Tiger being a super low-cost carrier with no frills at all.

THAI apparently does not want to build on its relationship with Nok Air because it does not own a controlling share. An attempt to buy a 10-per-cent share from Krung Thai Bank has come to nothing.

The airline’s board is, however, determined to get into the cheap end of the business, one way or another. As Mr Amporn explained, “In today’s business, we cannot survive in the long run if we do not compete at every level. We have lost huge opportunities by not having a budget airline for two years now, so it is high time to get things moving fast now.”

A detailed business plan for Thai Wings is due to be presented to the THAI board on June 11.

 

 

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