Thai Airways is making a sensible change, which I’d consider to be quite a positive development for consumers.
In this post:
Thai Smile brand will be discontinued
Thai Smile is a low cost carrier that’s a wholly owned subsidiary of Thai Airways. The airline launched operations in 2012, and has a fleet of 20 Airbus A320s. The airline operates a variety of regional routes, including within Thailand, as well as to China, India, Vietnam, etc. For that matter, Thai Airways has handed over its entire domestic network to Thai Smile, so Thai Airways doesn’t operate any domestic flights.
Thai Airways has now announced plans for Thai Smile to be merged into the mainline fleet, marking the end of road for the company’s low cost carrier. You can expect these A320s to again operate as part of the Thai Airways mainline fleet, with staff also being transfered over.
It hasn’t yet been revealed what will happen to the cabin products on these planes, but I would imagine we could see business class added back (currently these planes just have a premium economy section, consisting of economy seats with blocked middles).
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 will have 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 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
So, 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 outweighs 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 will be merged back into the Thai Airways mainline fleet, just over a decade after the concept launched. This will allow 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?
I think the main difference is easier connections and frequent flyer reciprocity. I don't think they will change their Premium Eco product. Why should they? Perhaps they rename it Business, because it is equivalent to the European Business Class (LH and the likes).
I've flown Thaismile for years but only on the Khon Kaen (KKC) to BKK route. In fact I'm using them next month as I'm flying to the UK for a month.
The advantage for me is that they fly into Suvarnabhumi rather than Don Mueang so I don't have to transfer. Vietjet is the only other one to do that. Also I don't have to worry about baggage as I'm always within the limits.
I've flown Thaismile for years but only on the Khon Kaen (KKC) to BKK route. In fact I'm using them next month as I'm flying to the UK for a month.
The advantage for me is that they fly into Suvarnabhumi rather than Don Mueang so I don't have to transfer. Vietjet is the only other one to do that. Also I don't have to worry about baggage as I'm always within the limits.
In economy they provide a snack, which is nice but I don't really need it. Before they rebuilt KKC they used to provide soft drinks and snacks in the departure lounge. I've always been impressed with the speed at which they serve tea and coffee on the flight as well.
I've flown premium economy twice and they provide a hot meal. I flew Swiss/Thai in business from the UK last year and the LHR to Zurich sector was in an A320 and that was the same layout, although the menu was better, but then KKC to BKK is only an hour with about 45 minutes actual flight time.
It might be a bit more expensive than Vietjet, Lion, Air Asia ect but I think it's worth it. On longer routes that might not be the case. Sad to see the name go but if the service is as good then I'll be happy.
Bad news and could be wrong move . Thai Smile established itself as a lovely energetic happy brand.
I never saw a true strategy behind Thai Smile, so it was really a messy and I'll conceived failure on all fronts. In addition to performing poorly on every front it damaged the reputation 9f the mothership. TG is now being run more professionally now and this is an opportunity to create a cohesive network that is operated synchronously.
There's another reason too that these subsidiaries are not longer as worthwhile and that's LIBERALIZED BILATERALS + INCREASED MARKET ACCESS.
Several of them, most notably Dragonair/Cathay Dragon, also had the distinction of possessing rights/slots to operate to airports that the mainline certificate did not: e.g. Dragonair to secondary mainland China, before CX could operate such.
No wonder, on our last trip flying into BKK on TG we opted to connect to PG (Bangkok Airways) as there were no benefits to us chosing Thai Smile as Star gold. PG provided a great product all told, with hot meals on BKK-HKT would you believe it and all at a lower cost than Thai Smile.
Anyone remembers TED? Ted’s dead, baby.
Just Flew Thai Smile in April / May 2023, what a schyteshow it was. Couldn’t interline the luggage between HKG-BKK-HKT (EK to Thai), limited selection of mileage programs… good riddance.
You should have flown TG. That's your punishment.
Long overdue!
Yes being a retired employee of TG I am very happy and sure this is a correct decision by the Thai management. Huge cost cutting measure. Less administrative costs, efficient personnel management and concentration more on flagship carrier etc. etc. All the best for TG
Do you know when they merge is expected to be completed?
How could they ever compete with AirAsia, who is basically a Spirit plane with Asian standards' crew but priced like Greyhound.
Safety...
Right,
How could they ever compete with AirAsia, who is basically a Spirit plane with Asian standards' crew but priced like Greyhound and a great, if not better, safety records.
Silkair and Cathay dragon are never low cost carriers. In fact, most business travellers prefer dragonair to Cathay pacific when they used to fly to the same desintations
Definitely preferred flying Dragonair over Cathay back when separate brands were maintained. It's also worth noting that Dragonair was never low cost - the soft product was exactly the same as Cathay mainline and you receive full Oneworld Elite benefits (unlike the confusing mess Star Alliance Connect is with Thai Smile).
The fact that this was the only Star Alliance Connecting Partner other than Juneyao speaks volumes about the failure of the concept. On the plus side, TG will finally be able to operate A320s in its mainline fleet (it had four of them a few years ago), in contrast to GA, MH and now SQ which have sided with the 737. But VN and PR operate the A321(neo) and Royal Brunei the A320neo, and Thai...
The fact that this was the only Star Alliance Connecting Partner other than Juneyao speaks volumes about the failure of the concept. On the plus side, TG will finally be able to operate A320s in its mainline fleet (it had four of them a few years ago), in contrast to GA, MH and now SQ which have sided with the 737. But VN and PR operate the A321(neo) and Royal Brunei the A320neo, and Thai Smile has none of those, nor will it be able to order any given its financial situation.
Juneyao is a special there. It’s private and it’s in China so it cannot be big enough to challenge the state corps (note: Hainan is still a Government of Province of Hainan company de jure, and Xiamen is by Government of Specifically Planned Municipality of Xiamen), while Juneyao still want some business passengers as most state companies in China requires Big Three when traveling and those close with gov require Air China only, if ever...
Juneyao is a special there. It’s private and it’s in China so it cannot be big enough to challenge the state corps (note: Hainan is still a Government of Province of Hainan company de jure, and Xiamen is by Government of Specifically Planned Municipality of Xiamen), while Juneyao still want some business passengers as most state companies in China requires Big Three when traveling and those close with gov require Air China only, if ever possible. So it does have a market where Big Four cannot touch and can continue the connection business.
You mention Singapore and SilkAir, but it is a bit different as Silk was between LCC and full service and Singapore didn't abandon having an LCC. They just got rid of Silk and split its functions between Singapore and Scoot, which is still the LCC that they own.
But there are other examples in the region. Malaysia Airlines has Firefly (as well as MASWings in Sabah and Sarawak), Garuda Indonesia has Citilink and Vietnam Airlines has Pacific Airlins. There is no sign of those being merged into the parent. PAL has PAL Express too.
Also note that in Northeast Asia, separate low-cost subsidiaries are alive and kicking; Cathay Dragon being folded into CX is the eCXeption and not the norm. ANA has Peach; JAL, Jetstar Japan; KAL, Jin Air; Asiana, Air Busan and Air Seoul; China Airlines has Tigerair Taiwan and Mandarin Airlines (EVA’s UNI Air isn’t an LCC).
You excluded HKexpress, now owned by CX as well
They should totally abandon Star Alliance Connecting Partner model altogether. I mean what real difference does it make between say Juneyao and Bamboo Airways!