Thai has benefited over the years from Bangkok being the main gateway into Myanmar and Indochina. This was the case because these less-developed markets had no local carriers with an international presence. Thai, however, faces a challenge: Vietnam Airlines has been expanding internationally and is trying to position Ho Chi Minh City as the gateway into Indochina and Myanmar. Lao Airlines, meanwhile, has moved beyond turboprops to Airbus A319s on international routes.
Chokchai says: “Bangkok still accounts for 43% of the international seat capacity into Myanmar, which is better than Singapore and Kuala Lumpur, which only account for 21% and 13%, respectively.”
As for Indochina, Chokchai says the airline's market share has deteriorated due to low-cost carriers. “Thai has lost some local traffic, but we have gained in terms of network-connecting traffic,” he adds. However, Thai is fighting back with its new short-haul operation, Thai Smile, which launched in July. It now has four 174-seat Airbus A320s and aims to have a fleet of 11 of the type by 2015. Chokchai says this full-service leisure carrier, which has “at least a 20% lower-cost base” than Thai's mainline short-haul operation, will be targeting Indochina.