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Wednesday, March 19, 2008

THAI set to co-operate with Indonesian national carrier

The flag carriers of Thailand and Indonesia are launching a co-operation initiative to strengthen competitiveness with regional low-cost carriers.

Thai Airways International president Apinan Sumanaseni and Garuda Indonesia chief executive Emirsyah Satar on Monday led executives in reaching co-operation deals to create win-win benefits for both parties, they said.

Part of the co-operation would involve Garuda feeding traffic to THAI's more extensive network, especially to Europe, where all Indonesian-registered aircraft have been banned since last July as the European Union declared them unsafe.

THAI serves several major European cities and other destinations in China where Garuda sees potential to transfer traffic from its own network. THAI executive vice-president Pandit Chanapai and his Garuda counterpart, Agus Priyanto, were concerned about the expansion of low-cost carriers, especially AirAsia, and agreed to work together to defend their market shares.

The carriers would share information and experience on LCCs in order to come up with ways to battle them, said Mr Pandit.

One of the battlegrounds is the Bangkok-Jakarta route, where AirAsia is adding a second daily flight on April 1 to capitalise on growing traffic.

THAI is countering this by adding three more flights a week on the route on March 29, raising total weekly frequencies to 10. All use wide-body Airbus 300 aircraft.

Mr Pandit said the cabin factor on THAI's Bangkok-Jakarta flight was currently averaging 80%.

Garuda's Mr Agus said the airline planned to put its daily Jakarta-Bangkok flight, which arrives very late at night, on an earlier schedule. Designed to attract more passengers, the change could take effect as soon as November.

Garuda's load factor on the Jakarta-Bangkok route is only 60% due to the poor timing. The airline also faced an aircraft capacity constraint, Mr Agus explained.

Other areas of co-operation cover sales, the use of THAI's lounges at Suvarnabhumi Airport for Garuda passengers, and a broader use of THAI's ground handling services at Suvarnabhumi. The talks did not cover a code-share agreement but executives of both airlines did not rule out the possibility in the future.

THAI shares closed yesterday on the SET at 28.50 baht, down 25 satang, in trade worth 57.88 million baht.

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