THAI Airways to launch budget line

The national carrier wants to create an airline, tentatively known as Thai Wings, because its attempt to form an affiliate with Singapore-based carrier Tiger Airways has gone nowhere. THAI chairman Ampon Kittiampon said Thai Wings would be established as part of a new business unit within THAI in order to ensure speedy development.

The proposed Thai Tiger Airways has been blocked by the Transport Ministry, which has refused to license the airline, citing technical shortcomings, since THAI signed a joint-venture agreement with the Singaporeans last August.

"We have lost huge opportunities without a budget airline for two years now, so it is high time to quickly set things in motion," said Mr Ampon.

THAI is already the largest shareholder in the budget carrier Nok Air with 39%, with the remaining shares held by government-linked financial entities. However, the national carrier has been frustrated for years by Nok's insistence on operating independently of THAI.

"The underlying principle of Thai Wings is to match any routes and fares offered by a competing airline," Mr Ampon said without naming Thai AirAsia, part of AirAsia, Southeast Asia's largest low-cost carrier based in Malaysia.

Thai Wings is expected to start commercial services next March or April, flying domestic and regional routes within two or three hours' flight time from Bangkok's Suvarnabhumi airport. The proposed airline would initially operate seven narrow-body jetliners, including five Boeing B737-400s now in THAI's fleet that would be leased. It will lease two more of the same model to complete the fleet and in its third year, four more jets will be added.

Its route network will become clearer when THAI management presents its business plan to the board in the annual strategic planning meeting scheduled for June 11, the THAI chairman said.

However, the initial plan is for Thai Wings to operate on some trunk domestic and regional routes served by THAI, which may have to curtail operations to make way for the new subsidiary. Cabin staff will come from Wingspan Services, which is majority-owned by THAI and supplies manpower to the flag carrier. The pilots will be mostly retired THAI captains.

Thai Wings is expected to need very little capital to start up and Mr Ampon expects it to be profitable its first year of operation.