Prime Minister Prayut Chan-o-cha is taking part in a plan to help Thai Airways International (THAI) recover from years of losses.
On Wednesday he is scheduled to preside over a new national tourism campaign called Amazing Thailand Go Local in Lamphun province. A collaboration between THAI and three state agencies -- the Tourism Authority of Thailand (TAT), Airports of Thailand Plc (AoT) and Krungthai Bank Plc (KTB) -- aims to promote domestic tourism and improve the fortunes of the flag carrier.
Under the plan, the TAT will try to lure foreign tourists and AoT will provide airport facilities for both airlines and passengers. KTB will offer digital payment solutions.
Ekniti Nitithanprapas, chairman of the THAI board, said Gen Prayut's actions indicate his concern for the airline's rehabilitation plan, whereby THAI aims to turnaround from losses to profit in the next four years (by 2022) and become a premium national airline for the domestic market in 2020.
Lamphun province is one of 55 secondary provinces that will be promoted as a new destination for locals and foreign tourists through new strategic plans for THAI and its alliances.
"This is the first time that state-owned enterprises are working towards the same goal with the premier joining the initiative," Mr Ekniti said.
On Sept 20, THAI management, led by newly appointed president Sumeth Damrongchaitham, were ordered by Deputy Prime Minister Somkid Jatusripitak to revise business strategies and rehabilitation plans that include aircraft procurement. The revision must be done this year.
"Yet the airline needs modern aircraft to improve products and services and enhance competitiveness, but I want to ensure transparency, which needs careful decision-making," Mr Ekniti said.
The company earlier proposed an aircraft procurement plan for 23 new aircraft with a total value of over 100 billion baht to the State Enterprises Policy Commission and the National Economic Social Development Board.
Despite agreeing to make the purchases, the NESDB demanded the plan be adjusted.
Mr Ekniti said the company has faced several challenges, including increasing jet fuel prices. Even though all airlines face this uncontrollable push in costs, the impact of efficient action and decisions by management will be dampened.
In addition, the airline will improve digital solutions and online channels in order to reach out to more customers and catch passengers from other airlines.
Moreover, THAI will source income from non-aviation products and services such as catering, ground handling and freighter services.
Revenue from non-aviation services represents just 3% of THAI's total revenue, while other major airlines earn up to 20%.
According to Mr Sumeth, THAI is optimistic about the Japanese market, given the potential to increase frequency from 84 flights a week to 100 a week in the future.
The airline last week celebrated 30 years of operating on Bangkok-Nagoya, one of five routes to Japan.
Top management of THAI, including Mr Ekniti and Mr Sumeth, joined Takashi Kawamura, mayor of Nagoya; Kimio Ishihara, vice-governor of Aichi prefecture; Masanao Tomozoe, chief executive of central Japan airport; and Naoe Akihiro, vice-chairman of the Japan Association of Travel Agents, at the event.
Thailand's outbound tourism to Japan has been robust since Japan exempted visas in 2013, quadrupling the number of Thai visitors to Japan to almost 1 million last year. The number of Japanese visitors to Thailand also rose to almost 1.5 million in the same year.
As a result of growing demand, flights between Bangkok and different cities in Japan have expanded rapidly in recent years.
THAI operates 84 flights a week to six airports in five cities: Tokyo (Narita and Haneda), Osaka, Nagoya, Fukuoka and Sapporo. Bangkok-Nagoya alone serves passengers on 14 flights a week. The airline said it intends to increase the number of flights to 100 a week in the future, but the addition will depend on aircraft utilisation and flight slots that are granted by Japanese aviation authorities.
Since the 1953 agreement between Thailand and Japan for air services, the number of direct flights operated by both Thai and Japanese carriers has been as high as 840 a month, not counting chartered flights.
THAI flights alone account for 37% of the total, or 308 flights.
Bansarn Bunnag, Thailand's ambassador to Japan, said that throughout the last three decades THAI has served as a bridge between Thailand and Aichi prefecture, starting at only two flights a week in 1988 and rising to two flights a day at present.
Aichi is a strategic partner for Thailand, especially on the economic front. More than 450 companies from Aichi invest in Thailand, accounting for one-third of the entire investment from Japan. Investment from Aichi alone has expanded by 20% over the past five years.
The relationship between Thailand and Aichi is stronger than ever, Mr Bansarn said, thanks to visits made by Mr Somkid in July and governor Hideaki Ohmura in August.
The embassy has been implementing an action plan geared towards deepening the bilateral relationship beyond Bangkok and Tokyo.
From this perspective, Aichi is viewed as an ideal partner in achieving the goal.
