Thai Airways gradually increased fares by 10% to 15% as higher jet fuel costs linked to unrest in the Middle East.
Thai Airways CEO Chai Eamsiri told media the airline has been managing the impact of the escalating conflict involving a US and Israel coalition and Iran. He said the most immediate effect was the jet fuel prices, which rose from US$80 per barrel to US$220 per barrel.
Chai said the increase led Thai Airways to raise ticket prices by 10% to 15% to reflect higher costs. He said the airline considers the current situation less severe than the Covid-19 period, when it could not operate flights, adding that Thai Airways can still run services on routes outside the Middle East and other affected areas.
However, Chai said Thai Airways may need to raise fares further if jet fuel prices continue to increase over the next few months.
He said the situation has also affected passenger travel decisions, with advance bookings down about 10% compared with the same period last year.
Chai said the airline’s executive board is due to meet this week to decide a short-term plan focused on survival measures and cutting unnecessary expenses until conditions improve. He said he did not believe the situation would be as difficult as the period when Thai Airways was under business rehabilitation.
Chai said Thai Airways had aimed to generate 200 billion baht in revenue this year, a 5% increase from last year, but the Middle East situation could lead to changes to that target. He said the company’s investment plans would be paused to maintain as much cash on hand as possible.
Despite rising costs, the Civil Aviation Authority of Thailand (CAAT) coordinated with several airlines to offer domestic flights with ticket prices reduced by 30% during the upcoming Songkran festival, when many people travel back to their home provinces.
Even so, airlines expect domestic passenger numbers during Songkran this year to be lower than in previous years due to the global situation.
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