THAI Smile shifts base to take on rivals

THAI Smile’s migration to Don Mueang airport starting later this week will herald changes for the budget subsidiary of struggling Thai Airways International.

Friday’s shift from the current base at Suvarnabhumi will culminate in a complete relocation by Oct 26, when the two-year-old THAI Smile will be fully entrenched at an airport dominated by powerful low-cost carriers (LCCs).

More importantly, the relocation represents the first step in a transformation that means THAI Smile will operate largely independently from its parent, especially from the perspective of flight connectivity with the flag carrier.

THAI Smile will gear itself towards point-to-point and non-connecting flights, rather than being required to provide flight connections to domestic and regional routes for THAI’s medium- and long-haul passengers.

To deal with domestic and regional services, which in the past were systematically transferred to THAI Smile to cut losses, the parent airline will operate flights deemed necessary for connecting with medium- and long-haul flights.

The upshot is that THAI will re-allocate five or six aircraft from THAI Smile’s fleet of 14 for the parent’s own direct use. Those five or six Airbus A320s will come with THAI livery and operate under the flag carrier’s own fleet and long-established airline code, TG.

“That’s the best way to tackle the most questionable logic — connectivity — behind the relocation of THAI Smile,” Suraphon Israngura Na Ayuthya, acting executive vice-president for commerce at Thai Airways, told the Bangkok Post.

By operating from Don Mueang, THAI Smile benefits from lower operating costs and support from THAI’s existing facilities at the airport, including aircraft maintenance and catering, whose operations were curtailed after Suvarnabhumi opened eight years ago.

THAI Smile also has more streamlined operations than its parent, allowing it to better compete with other players.

THAI Smile’s move to Don Mueang has a single agenda: to wrest market share from rivals like Thai AirAsia, Nok Air and Thai Lion Air in the fast-growing budget segment.

Mr Suraphon made no secret of the fact that THAI Smile will specifically take on Thai AirAsia, the dominant player at Don Mueang, and team up with Nok Air, 39% owned by THAI, to bolster the bid.

THAI Smile and Nok Air will not compete directly with each other, but instead complement and supplement the other by avoiding duplication in routing.

Don Mueang is seen as a popular marketplace for domestic and regional flights, especially among Thai travellers, because of its accessibility, convenience and hassle-free nature compared with crowded Suvarnabhumi.

THAI Smile chief executive Woranate Laprabang last Thursday announced the lofty goal of capturing a 20% share of passenger traffic through Don Mueang.

Nearly 20 million passengers are expected to pass through Don Mueang this year, with 12 million carried by Thai AirAsia and six million by Nok Air.

Mr Suraphon told the Post that THAI Smile is still in the red and hopes to narrow losses and eventually return to the black in the coming years as the bottom line improves with the shift to Don Mueang.

He confirmed that THAI Smile’s “light premium” concept remains unchanged and will set the airline apart from other LCCs at Don Mueang.

The carrier’s services include seat selection and check-in counter service, on-board snacks and drinks and a baggage allowance of 20 kilogrammes, all included in the fare — amenities considered extra and chargeable by typical LCCs.

THAI Smile passengers also enjoy Royal Orchid Plus mileage as they would on THAI flights.

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