Originally Posted by
Kremmen
Why a severe cutback? They have the ability to grow. "cabin factor was 75.4%, up from 70.1% in 1Q14". That's a huge improvement. They have a good product. As has been discussed here often, they make some crazy pricing decisions and have various problems with their web site. That can all be fixed. (And if the real problems aren't fixed, severe cutbacks won't fix them!) They are one of the two main Star Alliance carriers in SE Asia and should be pushing that more, not cutting back.
if you read many threads here, you will find that TG has been on a downward trend for years, financially and in terms of relative product quality. Q1 is a very good quarter for TG as this is holiday season for foreign tourists and 2014 Q1 was poor due to political events. But a 75% load factor in peak season is NOT good. TG is loss-making but has a habit of announcing brief periods of financial improvement on a tactical basis, then reverts back. The huge arbitrary tax credit is typical.
A major problem with TG is inefficiency.
You might remember this article:
http://centreforaviation.com/analysi...iveness-184815
TG has 250 employees per aircraft compared to less than 140 for SQ and CX. This might not be the perfect ratio, but all ratios go in the same direction. Awful productivity, plenty of nepotism, unmotivated staff.
It is hard to point to any positives for TG except that they are based in Thailand, a wonderful destination, and offer huge number of premium awards.
To me TG is fully inconsistent product-wise (uncompetitive premium product except in price), disparate fleet, unreliable in terms of scheduling/ac, antique website/booking engine/yield management. I will never use TG anymore (I used to) for business travel, too inconsistent and unreliable.
MH publicly announced that they will transform into a regional airline and a feeder of OW airlines in/to Malaysia. As said before, I doubt that TG will do that. And they do suffer from the fact that a lot of tourists bypass Bangkok. Phuket is a huge destination and TG does not fly longhaul from/to Phuket. They are losing so much traffic to airlines flying nonstop to HKT from Europe or to ME3 that provide excellent products at cheap price. Ko Samui is "owned" by PG. TG used to be the only hub to several nearby countries (Myanmar, Vietnam, Laos), but that comparative advantage is disappearing.
Some people will disagree but, IMO, TG is a poor airline with huge cost base because of overstaffing and inefficiencies and facing increasing competition on all fronts. TG needs enormous financial investments to overhaul its IT, harmonize its fleet to new standards and layover staff. To me, this is hopeless unless oil prices stay very low for several years (they are going up again) and management reaches international standards with limited political interference.