In May 2023, Thai Airways announced a sensible change to subsidiary Thai Smile, which I’d consider to be good for consumers. At the time, we didn’t know the timeline for this change, though there’s now an update…
In this post:
Thai Smile has been merged into Thai Airways
Thai Smile was a low cost carrier that was a wholly owned subsidiary of Thai Airways. The airline launched operations in 2012, and had a fleet of 20 Airbus A320s. The airline operated a variety of regional routes, including within Thailand, as well as to China, India, Vietnam, etc. For that matter, Thai Airways had handed over its entire domestic network to Thai Smile, so Thai Airways didn’t operate any domestic flights for years.
As of January 1, 2024, the Thai Smile brand has been completely discontinued. Thai Smile has now been merged into the Thai Airways mainline fleet, marking the end of the road for the company’s low cost carrier. All staff, including pilots and flight attendants, have also been offered jobs at Thai Airways.
Thai Airways hasn’t changed any of the cabin products on former Thai Smile aircraft, as the airline historically offered economy and premium economy. Thai Smile’s premium product offered economy seats with blocked middles.
Thai Airways is now marketing this product as business class. However, during the booking process, there’s now a specific prompt you have to agree to, understanding the product being offered. This is because the airline has been investigated by authorities over false advertising related to this product.
It remains to be seen if Thai Airways will eventually reconfigure former Thai Smile jets with new interiors, or if this is how things will remain.
If you ask me, this change makes perfect sense. Yes, there were some cost savings for paying staff working for the low cost carrier a bit less. But aside from that:
- It’s less efficient to have a separate Air Operator Certificate, requiring operations to be managed independently
- Thai Airways’ mainline fleet otherwise only consists of wide body jets, so the airline now has a lot more flexibility with narrow body jets in its fleet; the airline can fly the planes with the right capacity to the right destinations
- Many frequent flyers avoided Thai Smile, given that the airline didn’t offer the same perks as Thai Airways, both in terms of passenger experience and frequent flyer reciprocity (this change is especially great for Star Alliance Gold members, who now get full perks on these flights)
This follows the industry trend, and is logical
Thai Airways isn’t the first airline to merge a subsidiary back into its mainline fleet:
- We’ve seen Singapore Airlines integrate subsidiary SilkAir into its mainline fleet, meaning Singapore Airlines now flies Boeing 737s
- We’ve seen Cathay Pacific integrate subsidiary Cathay Dragon into its mainline fleet, meaning Cathay Pacific now flies more A330s as well as A321s
Now, in fairness, SilkAir and Cathay Dragon both weren’t explicitly low cost carriers in terms of their passenger experience, but they did offer some cost saving advantages over their mainline counterparts in terms of labor.
Why are these subsidiary concepts failing, or at least no longer found to be worthwhile? Well, going back over a decade, ultra low cost carriers weren’t nearly as prevalent and competitive in Asia. So there was some merit to full service airlines setting up low cost units.
What has changed is that ultra low cost carriers are now fiercely competitive, and these subsidiaries really can’t compete on cost with those airlines. So they’re kind of offering the worst of both worlds — they can’t compete with ultra low cost carriers on cost, and they can’t compete with full service airlines on product.
At this point the synergies from eliminating these subsidiaries outweigh any benefits they may offer airlines. And I’d say that’s good for consumers, especially for frequent flyers and those looking to earn and redeem points.
Bottom line
Thai Smile has been merged back into the Thai Airways mainline fleet, just over a decade after the concept launched. This allows Thai Airways to once again have A320s (or any narrow body aircraft, for that matter) in its mainline fleet, which is a positive development.
It’s interesting to see how Thai Airways is now the third major Asian carrier to eliminate a subsidiary in recent years.
What do you make of Thai Smile being integrated back into Thai Airways?
Seems like people confuse or something about their 'regional subsidiary' and 'low-cost subsidiary'. SIA and Scoot is definitely not a relation of Thai and Thai Smile. Scoot is just a low-cost airline of Singapore Airlines Group, and was not established just to serve routes that SIA don't serve (although they have their own routes but they share some destinations). CPA and HK Express is a bit different (since they acquired them from HNA Group) but...
Seems like people confuse or something about their 'regional subsidiary' and 'low-cost subsidiary'. SIA and Scoot is definitely not a relation of Thai and Thai Smile. Scoot is just a low-cost airline of Singapore Airlines Group, and was not established just to serve routes that SIA don't serve (although they have their own routes but they share some destinations). CPA and HK Express is a bit different (since they acquired them from HNA Group) but not a big difference either.
And even if they exist to fly to the destinations out of the main carriers' coverage, it's still better than not having direct flights at all. I mean, Silkair and Cathay Dragon were still a full-service carrier, so the fact that SIA and CPA kept most of their flights mean that they're profitable and competitive enough to be served by the FSCs. Scoot and Cathay Dragon are LCCs, so nowadays, especially in Asia, are more sensitive and competitive in terms of price. Let' say, hypothetically, people flying btwn. Busan, South Korea to Hong Kong, a route which HK Express exclusively serve (no Korean carriers serve this route as of now), for travelling wouldn't be so happy to be forced to fly more pricey CPA or transfer at somewhere else. Scoot and HK Express have some routes that they exclusively serve, and there's reason why SIA and CPA don't serve that routes.
In my opinion, both SIA and CPA should keep Scoot and HK Express, as they offer cheaper flights, and it's still better than not having direct flights at all. But partnerships with SA carriers, just like what Eurowings does would be essential...
Hopefully other Star carriers like SQ follow by getting rid of Scoot or Air India with Air India Express etc
Goodness knows what the Star Alliance is up to these days. Launching the so-called Connecting Partner concept with only Juneyao and Thai Smile as members, the latter of which now no longer exists. Launching an ‘intermodal’ partnership with Deutsche Bahn. Launching a co-branded credit card with HSBC in Australia. And yet, when it comes to actually adding members, not a single airline has joined as a full member since Air India in 2014.
Look at...
Goodness knows what the Star Alliance is up to these days. Launching the so-called Connecting Partner concept with only Juneyao and Thai Smile as members, the latter of which now no longer exists. Launching an ‘intermodal’ partnership with Deutsche Bahn. Launching a co-branded credit card with HSBC in Australia. And yet, when it comes to actually adding members, not a single airline has joined as a full member since Air India in 2014.
Look at Oneworld, picking up Alaska, Royal Air Maroc, Oman Air (coming this year) and soon Hawaiian after its merger with AS. SkyTeam bagged Virgin Atlantic, and will soon snatch SAS away from Star, the very alliance it founded. The only possible new Star airline is ITA Airways, should LH succeed in acquiring it — in which case it’s a one-for-one trade: give SAS and take ITA.
But the world’s oldest and largest alliance has gotten too complacent, and I wish it would add a couple of cool new members. Azul, Air Astana (as in my other comment below) and probably Gulf Air to cover the Middle Eastern gap all sound like good fits to me.
Star already has far too many members. They dont need anymore!
Singapore Air still has Scoot and Cathay still has Hong Kong Express. They folded in one discount brand, and just push low-yield traffic to the other discounter. As you mentioned Ben, I avoid them due to not earning miles in partner programs, unless it's significantly cheaper than the competitor.
Thai Airways International has been investigated by CAAT (Civil Aviation Authority of Thailand) for selling some of their economy class seats as business class on ex-Thai Smile A320s, just like European carriers (I don't know what happened afterwards though). This happened because of passenger complaints, including some social media posts.
So maybe we can change European carriers' afwul cost-saving strategy, but this is probably a delusional idea.
Star Alliance needs to have a good look at their Connecting Partner model. Juneyao Air is the only airline left and there is rarely any possibility to book them on a single ticket with a full member.
Can think of a couple airlines that could be a good fit, such as KC, J2, maybe even HX. Though I agree that the concept has failed pretty considerably
For the uninitiated: KC = Air Astana, J2 = Azerbaijan Airlines. Since no Central Asian airline has ever joined an alliance — other than MIAT Mongolian muttering about Oneworld Connect (though I guess it’s too small for even that) — I think Air Astana, in particular, would be a very nice fit for the Star Alliance. All the more so since Star has never had a Russian member, and it would provide good coverage of...
For the uninitiated: KC = Air Astana, J2 = Azerbaijan Airlines. Since no Central Asian airline has ever joined an alliance — other than MIAT Mongolian muttering about Oneworld Connect (though I guess it’s too small for even that) — I think Air Astana, in particular, would be a very nice fit for the Star Alliance. All the more so since Star has never had a Russian member, and it would provide good coverage of the CIS and Siberia.
HX (Hong Kong Airlines) is highly unlikely, as it remains under the control of the HNA Group, none of whose airlines have expressed any willingness in joining a global alliance — indeed, HNA is its own Chinese alliance of sorts!