U.S. Tourism Enhancement Through Collaboration: THAI Collaborates with Airlines to Scrap Direct Flights to America
Thai Airways Persists in Courting US Tourists, despite Scrapping Direct Flight Plans
Thai Airways International (THAI) remains dedicated to drawing in American tourists to Thailand, even though they've abandoned plans for direct flights to the USA. In response to the Federal Aviation Administration (FAA) upgrading Thailand's aviation safety rating from Category 2 (CAT2) to Category 1 (CAT1), Thai airlines are once more permitted to operate direct flights to USA airspace.
However, following a feasibility study, THAI discovered that long-haul routes to the USA were financially impractical due to the hefty fuel costs involved. Additionally, return flights from the US would necessitate a reduction of over 100 passenger seats, and cargo transport would face severe restrictions due to fuel constraints impacting payload capacity.
"Given our past records in the U.S. market, we've operated there for over a decade but consistently posted losses, even after adjusting strategies including stopovers, profitability remained elusive," said CEO Chai Eamsiri. "The extensive distances to destinations like Los Angeles and New York-requiring 17-hour flights-lead to high operational costs."
Despite not resuming direct flights, THAI retains a presence in the American market. Approximately 30% of its revenue originates from European travelers, with Asia and the US market showing potential. By joining forces with six American airlines operating within the region, THAI has managed to sustain revenue growth in the US market.
Market and economic considerations, operational costs, competition, and geopolitical factors are among the factors influencing airlines' decisions on resuming routes. Thai Airways may rely on partnerships with other airlines for U.S. routes rather than operating direct flights themselves, leveraging codeshares and interline agreements to offer seamless travel options.
- TAGS
- Thai Airways International
- airlines
- tourism
- US
- American
- direct flights
- cost management
- profits
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Factors Influencing Airline Route Decisions:
- Market and Economic Considerations: Airlines assess demand and profitability before resuming routes. If there's insufficient demand or if competitor routes offer a more enticing option for passengers, an airline might choose not to resume direct flights to the U.S.
- Operational Costs and Logistics: Resuming long-haul flights involves substantial logistical and operational costs, including fuel, maintenance, and crew training.
- Competition and Partnerships: Thai Airways might collaborate with other airlines for U.S. routes rather than operating direct flights themselves, utilizing codeshares and interline agreements to provide travelers with seamless options.
- Geopolitical and Safety Factors: While a safety rating upgrade helps ease safety standards, geopolitical tensions or security concerns could still impact route decisions, as demonstrated in the recent India-Pakistan escalation.
- To address the financial impracticality of operating long-haul flights to the USA, Thai Airways International might consider partnerships with American airlines, capitalizing on codeshares and interline agreements to offer travelers a seamless experience and retain a presence in the US market.
- Despite Thai Airways International abandoning plans for direct flights to the USA due to hefty fuel costs and feasibility concerns, market and economic considerations remain crucial factors in determining whether an airline resumes a route, as demand and profitability plays a significant role in their decisions.
- Given the extensive distances to US destinations like Los Angeles and New York, requiring 17-hour flights, Thai Airways International has historically struggled with high operational costs, despite adjusting strategies such as stopovers, making direct flights to the USA a questionable investment.
- By joining forces with six American airlines operating within the region, Thai Airways International can sustain revenue growth in the US market, with the airline deriving approximately 30% of its revenue from European travelers and the Asia and US market showing potential for further expansion.
