THAI’s sister company endorsed by the cabinet

The cabinet today approved Thai Airways International’s 1.8 billion baht plan to set up a sister company, Thai Smile Airway, to operate domestic and regional flights.

The affiliated company will be a legal entity with the status of a state enterprise and will be wholly owned by THAI with 100 percent share ownership.  Altogether 180 million shares priced at 10 baht each at par value will be issued, said deputy government spokeswoman Sunisa Lert pakawat.

Beginning this year, Thai Airways International will invest 450 million baht in the new airline followed by the rest, 1,350 million baht, for the following year.  Although Thai Smile Airway is a state enterprise, regulations regarding state enterprise will not be applied to the new airline, said Sunisa.

The new airline will provide domestic air service and regional air service covering Asean, China and India with maximum flight time not exceeding four hours.

Thai Smile Airway is set to position itself as a bright, modern, safe, friendly and punctual regional airline with quality and standardized services closely on par with THAI.

The new airline will target 30 percent of THAI’s passengers who are to connect flights to other domestic or regional destinations.  The air fares of the economy class of regional flights will be about 20 percent cheaper than those charged by THAI and the air fares of economy class of the domestic flights will be equivalent to those of THAI’s Q class.

Initially, the staff of the new airline will number 537 and this will be increased to 892 next year.  The airline will take delivery of 20 narrow-bodied A320-200 planes from THAI to operate until 2017.

The new airline is expected to make 1.9 billion baht profits in 2017.