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Thai Air Asia says new Covid outbreak has destroyed business

Maya Taylor

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Thai Air Asia says new Covid outbreak has destroyed business | The Thaiger
PHOTO: Wikimedia
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The executive chairman of Asia Aviation, the largest shareholder in Thai Air Asia, says the Covid-19 resurgence has “destroyed the low-cost carrier”. Tassapon Bijleveld says that, even without a national lockdown, bookings have plummeted.

“Travel sentiment has plunged lower than last year. This is different this time because people are voluntarily skipping their travel plans even without a nationwide lockdown order from the government.”

According to a Bangkok Post report, Tassapon does not expect things to improve next month. Despite the Thai government introducing extra holidays over the Chinese New Year period, Tassapon predicts that the new wave of Covid-19 will prevent most domestic tourists from travelling.

“This could be the quietest Chinese New Year we’ve ever had.”

This month, Thai Air Asia bookings have dropped by over 50%, with the carrier forced to merge and cancel many flights. Some aircraft carried only 20 – 30 passengers, a significant drop on numbers just 2 months ago. Back then, it seemed Thailand had dodged the Covid bullet, with no cases of community transmission in several months. Even though restrictions were still in place on international arrivals, the domestic market was picking up somewhat.

“We were just rebounding from the first lockdown last year. Despite hardly any profits, at least we could have had a consistent revenue stream from the domestic market. But this outburst of new cases destroyed us.”

The airline industry in Thailand has been calling for a financial safety net in the form of soft loans, with 8 carriers teaming up to submit a financial aid proposal to the government last year. Tassapon says the airlines provided all the necessary information to PM Prayut Chan-o-cha, as well as to 3 ministers from the Finance Ministry, and to the relevant banks. To date, they’ve had no response.

He says Thai carriers are fighting for survival and if the market doesn’t pick up next month, some may go out of business.

SOURCE: Bangkok Post

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7 Comments

7 Comments

  1. Avatar

    Mark

    Friday, January 8, 2021 at 10:35 am

    Bye-bye crap airline

  2. Avatar

    Galaxy

    Friday, January 8, 2021 at 11:41 am

    “The airline industry in Thailand has been calling for a financial safety net in the form of soft loans, with 8 carriers teaming up to submit a financial aid proposal to the government last year. Tassapon says the airlines provided all the necessary information to PM Prayut Chan-o-cha, as well as to 3 ministers from the Finance Ministry, and to the relevant banks. To date, they’ve had no response”
    WE HAVE THE MOON PROJECT

  3. Avatar

    Susan

    Friday, January 8, 2021 at 12:02 pm

    I work in the tourism industry and we have no business or income since March so I think Air Asia has more finances than most travel agents who have nothing.

  4. Avatar

    chupapi

    Friday, January 8, 2021 at 12:53 pm

    hmmmm I travelled Krabi return last week with Airasia and both flights were fully booked. Prices were also not so low. Of course it is not very relevant to consider just one trip, but i have not seen this disaster so far for this company.

  5. Avatar

    Issan John

    Friday, January 8, 2021 at 1:09 pm

    He’s got mt sympathy, as has @Susan, but I hope he’s right.

  6. Avatar

    Mr cynic

    Friday, January 8, 2021 at 6:44 pm

    Guys trying to keep a pre pandemic profitable buissness going and to date has made a very good job of it.
    It’s not like he’s popping round and asking for free money like thai,he’s asking for a competitive government backed loan to keep his staff employed and company afloat.
    Would you prefer private companies like this that under normal times make money to go bankrupt and end up with Thai having a monopoly?
    Good luck to the guy.

  7. Avatar

    Pst globetrotter

    Friday, January 8, 2021 at 11:03 pm

    The airlines and agents had seen what their western counterparts endured last year. They could have had systems in place for a crisis like this. Instead, customers can’t contact most call Centres (Airasia have been using a ridiculous chatbot system since last March and stopped the call centre, so they deserve what they will get). Rebooking on apps is failing for multiple airlines & agents. Agents not passing on correct terms and conditions for customers. If you are lucky enough to get a human – after being on hold one hour – you get staff working from home (fair enough), without the ability to do anything but say, we will pass this case to another team who will email you at a later time. That time being after your flight leaves, so you are now a no-show and out of pocket.
    Let them all rot.
    Besides, we’ll have the bullet trains next year.

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Government is to allow people to use “legal” parts of cannabis in business

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Government is to allow people to use “legal” parts of cannabis in business | The Thaiger
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With intentions to promote cannabis as the country’s potential new cash crop, the government is preparing guideline to allow people to produce, sell or own cannabis and hemp. The permitted businesses, including textile, pharmaceutical, and cosmetics will be able to register to receive FDA permissions from January 29.

According to the FDA secretary-general, leaves, stalks, stems, roots, flowers, and seeds are not in a list of legal parts as they have high drug content (is there anything left?). Individuals are still not allowed to grow both cannabis and hemp without authorisation. Import and export of hemp must seek permission from the FDA Office as well.

Interested applicants in Bangkok can register at the FDA Office, while those in upcountry can contact the provincial public health offices. Courses and training about how to start a business using marijuana plants will be provided under the collaboration of the Education Ministry and Public Health Ministry.

However, a traditional medicine expert with Chaopraya Abhaiphubejhr Hospital, suggests that 6 groups of people should avoid food and drink with marijuana, including those with liver and kidney problems, heart disease patients, people aged below 25, pregnant women, breastfeeding mothers, and those taking stimulant medications.

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Myanmar cancels Thai investment in the Dawei Special Economic Zone

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Myanmar cancels Thai investment in the Dawei Special Economic Zone | The Thaiger
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The Dawei Special Economic Zone Management Committee has announced the cancellation on the deep seaport project contract with Italian-Thai Development (ITD), one of Thailand’s leading industrial firms, by saying that they “lost confidence” in the company after long, controversial issues.

The Dawei Special Economic Zone Management Committee said that the Thai company has caused them “repeated delays, continuing breaches of financial obligations under the contracts and the concessionaires’ failure to confirm their financial capacity to proceed with development”.

They say they will look for new development partners to continue the projects. Currently, there are still no comments from ITD.

The Dawei Special Economic Zone is Myanmar’s initiative to encourage international investments into the country, but the project has been delayed because of funding problems and local opposition.

SOURCE: Thai PBS World

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Future of Thai department stores is being redefined

The Thaiger

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Future of Thai department stores is being redefined | The Thaiger

While department stores have been a familiar destination for Thai people for many decades, CBRE, an international property consultant, is witnessing a decline in popularity and stunted growth, particularly in 2020 when Covid-19 adversely impacted the sector. CBRE believes that to adapt to e-commerce disruption and the changing consumer behaviour, department stores in 2021 (and beyond) will have to fine-tune their business model in terms of customer shopping experience, inventive activities and value-added programmes to continue their status as the second home for Thai shoppers.

Jariya Thumtrongkitkul, Head of Advisory and Transaction Services – Retail, CBRE Thailand explained… “While department stores offer shoppers convenience, saving them time with many varieties of goods grouped in different departments and allowing the shoppers to find and compare products and choose what they want, the traditional department store model does not fit the needs, lifestyle and behaviour of its shoppers anymore, especially the new generations.”

According to CBRE Research, the total retail supply in Bangkok as of Q4 2020 increased to 7.8 million square metres, a 1.16% increase year-on-year. Out of this, only approximately 3% was reported within the department store format. The department store market in Thailand is mainly dominated by two domestic retail giants, with Central Group and The Mall Group holding the largest market shares. They do not only concentrate in Bangkok, but have also opened department stores in many major cities throughout the country which allowed them to build bigger networks and grow their customer base.

In the past few decades, Japanese investors had also shown interest in entering the Thai market and offered local features that are well-known in Japanese department stores: simplicity, premium quality and services. However, with strong competition many Japanese department store operators have ceased their expansion plans. Some have exited the country due to the fierce competition against the local players, their performance in Thailand and the shrinking Japanese department store business, especially in overseas countries.

“The department store concept as a one stop shopping place is still in demand for certain groups of customers. However, with the e-commerce disruption and changing consumer behaviour, department store operators need to adapt their models, offerings and value-added services to their customers to cope with the challenging economic and market conditions.”

Adaptability of department stores can be highlighted into 3 main parts: customer shopping experience, inventive sales and marketing activities, and value-added programmes. While more and more younger generations prefer to shop online to save time and money, the brick-and-mortar store is still believed to be the second home for Thai shoppers. Department stores should be more agile in the era of e-commerce and adopt some technological innovations such as in-store automation and mobile payment solutions to reach the younger crowds.

Design is another aspect that plays an important part in customer shopping experience. Department stores can be more creative in remodelling traditional department store space into some ingenious and interactive space with a great design and right product portfolio mix for their customers.

The Mall Group, for example, has launched its first “Lifestore” concept at The Mall Ngamwongwan at the end of 2020 by redesigning and renovating its traditional department store space to enhance customer shopping experience and enjoyment.

The second part to be considered for the adaptability comprises inventive activities related to sales and marketing. The prices of products being sold in a department store are normally set high to cover the higher establishment and operating costs by operators, narrowing their target to only upper- to high-income customers.

Brand offerings may also no longer meet fast-changing customer needs since today’s shoppers have more choices in buying products online, not to mention the declining footfall due to the growth of e-commerce. CBRE Research has seen domestic players pushing hard to drive sales growth via numerous promotions, marketing campaigns and activities and collaboration with credit card companies during seasonal sales.

The third part consists of value-added programmes such as personal shopper, customer loyalty programme, on-demand solution and service personalisation, which have become a new trend as customers, including the aging population, are now more sophisticated and demanding.

The retail landscape has changed drastically in the past few years from various factors like technological advancement, consumer behaviour and preference as well as Covid-19. Cookie-cutter strategy will be a thing of the past, especially for department stores where the format and offerings have remained the same for decades.

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