Thai Airways Ends North American Service After 35 Years

Thai Airways Boeing 777-200

Thai Airways International

Thai Airways International (TG) will end its 35 years of service from its hub in Bangkok, Thailand to North America starting on October 25, 2015.

Details

History

Thai Airways North American Routes

Thai Airways North American Routes – Information taken from airline’s website. Infographic created by Experience The Skies on July 23, 2015 (All Rights Reserved)

1980s/1990s

Thai Airways is a Star Alliance founding member that served North America since 1980 with Bangkok Don Mueang  International Airport (BKK) to Seattle Tacoma International Airport (SEA) via Tokyo Narita International Airport (NRT). This was expanded to Dallas Fort-Worth International Airport (DFW) and Toronto Pearson International Airport (YYZ) in the late 1980/early 1990s.

Vintage Thai Airways International Livery

Vintage Thai Airways International Livery – Image from http://www.airliners.net/photo/Thai-Airways-International/Boeing-747-4D7/1673121/M/ – taken by Amorn PonJaroen (All Rights Reserved)

2000s/2010s

After ending service to these destinations, Thai Airways operated two of the longest non-stop flights in the world in the 2000s by operating from Bangkok Suvarnabhumi International Airport (BKK) to New York JFK International Airport (JFK) and Los Angeles International Airport (LAX) with Airbus A340-500s. Both flights would require up 17 hours to operate (refer to our coverage on the longest non-stop flight in the world today here) . Although load factors were up to 80%+, Thai Airways did not turn a consistent profit on these two routes due to intense Pacific route competition, higher fuel costs (due to the four-engine design of the Airbus), lower capacity (Thai Airways configured the A340-500 with only 235 seats) and lower aircraft utilization (due to longer layovers at destinations).

Present

After the non-stop flights were cancelled by 2012, Thai Airways continued North American service with a flight from BKK to LAX via Incheon International Airport (ICN) located in Seoul, South Korea. This was operated four times weekly on board a Boeing 777-200ER configured for 292 seats with Business Class (Royal Silk)(30) and Economy (262).

Thai Airways International Boeing 777-200

Thai Airways International Boeing 777-200 – Image taken by Aero Icarus from Zürich, Switzerland [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons (All Rights Reserved)

Initially, the airline trimmed the flight from four to three times weekly starting on October 25, 2015. However, based on the updated schedule, the airline decided to end the service all together along with flights to Rome.

Analysis

It was not surprising that Thai Airways decided to pull out of the North American market. In the latest quarterly filing, this market contributes only to 0.8% of the airline’s overall revenue. Capacity contraction will also make a small dent to over passenger count at BKK (refer to our coverage of the  2014 Top 30 Airport by Passengers list – BKK dropped from 17th to 22th).

It has never been a key strategic focus for the airline to expand to North America over continued focus on regional Asian and European flights.

Thai Airways International Q1 2005 Revenue Analysis

Thai Airways International Q1 2005 Revenue Analysis – information taken from airline’s website. Infographic created by Experience The Skies on July 23, 2015 (All Rights Reserved)

The following are other reasons why Thai Airways pulled out:

1. Hard Product – The Boeing 777-200ER aircraft has a very outdated interior compared with its competitors. Business Class has an angle flat seat design which is two generations behind the market default. Economy seats feature older generation of inflight entertainment systems and do not have AC power ports at all seats. Also there is no WiFi available in all classes.

2. Scheduling – Flying through ICN adds at least 2.5 hours to the travel time compared the previous non-stop flight.

3. Given the additional flight times and inferior product, prices have not been very competitive compared to other Asian and Middle Eastern based airlines.

4. Middle East Respiratory Syndrome (MERS) – This disease made impacts to South Korean travels. Even though Thai Airways only operates through the airport, there may be inert safety concerns.

5. After failing the ICAO Safety Audit (refer to our coverage of the audit here), the US Federal Aviation Authority (FAA) conducted its own review and noted similar deficiencies in staffing. In particular, there were three items noted (1.  lack of an aviation inspector and lack of qualified staff for aircraft being operated in the country, 2. an incomplete aviation manual which might be due to lack of staff, and 3. improper testing which was also possibly due to inadequate staffing). It is giving the Thai aviation authority 65 days to review and provide remediation plans. Without a plan in place, the FAA can place significant restrictions on flights service by Thailand based operators to the US.

For the time being, Thai Airways has codeshare agreements with place with All Nippon Airways (NH) and Asiana Airlines (OZ) to North America.

What Could Thai Airways Have Done Differently?

Thai Airways never focused on the North American market and did not have a main strategy to manage expectations. Here are some areas the airline could have improved on:

1. Fly into Star Alliance partner hubs and codeshare with them. Unlike EVA Airways or SAS, Thai Airways never started flights to key North American hubs like Chicago, San Francisco, Vancouver, Houston, etc which could have benefitted from more feeder traffic (some of these cities might require one stop). Given Bangkok is not served by North American airlines directly, there may be appetite to codeshare opportunities with United Airlines and Air Canada.

2. Thai Airways could have considered using its more fuel efficient aircrafts Airbus A380 or Boeing 787s to North America. Both are capable of making the US west coast non-stop.

3. Thai Airways could have been more price competitive when it stopped the non-stop options.

Final Call

Thai Airways ends a 35 year legacy when it ends service to North America on October 25, 2015. It is important for the airline to continue its turnaround plan by focusing on its Asian (through mainline and subsidiary service) and European network before tackling the North American market again.

 

 

2 thoughts on “Thai Airways Ends North American Service After 35 Years”

  1. I’m disappointed to hear Thai is ending service to North America. Los Angeles is the highest population of Thai people outside of Thailand. They also offer exceptional service. I hope they change their mind in the future and reconsider returning to Los Angeles.

    1. experiencetheskies

      It is definitely not the best of news. However, it is entirely possible that Thai Airways will return in the future when it receives its first Airbus A350.

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