Thesis: Low Cost Airline in Thailand

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[. . .] One now needs a BA to be Member of Parliament, setting up a whole new arena for potential corruption. Ironically, it was the military that forced political reform to proceed, easing public tensions and siding with a popular cause against an 'unusually corrupt' and incompetent government. For example, 123 members of the Thai parliament received envelopes containing fifty 1000 baht notes from the Minister of Education during a 6 February 1997 meeting about reform of the education system[footnoteRef:9]. [9: Van Esterik, P. (2000). Materializing Thailand / . Oxford, England: Berg. Retrieved June 11, 2011, from Questia database:]

Nature of Airlines

Before the advent of international airlines, Thailand was much neglected by tourists, as Bangkok was far from the main sea lanes. The health hazards existing in Thailand are said to have been greatly exaggerated in Penang and Singapore; and in any case, relatively few travelers took the time and trouble to leave world sea routes at Singapore or Penang to visit Thailand, and few passenger ships came to Bangkok[footnoteRef:10]. [10: Binggeli, U., & Pompeo, L. (2002). Hyped Hopes for Europe's Low-Cost Airlines: Europe's Most Successful No-Frills Carriers Are Making a Lot of Money. But as They Mature, They Will Have Problems Expanding. 87+. Retrieved June 11, 2011, from Questia database:]

In the early 1930's, Royal Dutch Airlines (KLM) established an air service between the Netherlands and Java, calling at Bangkok. By 1935 the company had one flight a week each way, with an overnight stop at Bangkok. (At that time most airports was not lighted for night flying, so that overnight stops were generally made between Europe and the Far East.) A trip to London took six days on planes seating 14 passengers.

Gradually larger planes and more airlines began stopping in Thailand, so that by 1950 the city had become one of the world's important aerial cross roads. Today Bangkok is, after Singapore, the most important air center in Southeast Asia. Airlines stopping there include Royal Dutch, Pan American, Air France, British Overseas, Scandinavian, Philippine, Malayan, Swissair, Air India, Air Viet-Nam, Air Laos, Union of Burma, Cathay Pacific, South American, and Far East[footnoteRef:11]. [11: Vikitset, T. (1998). 14 Liberalisation and Privatisation of the Thai Power Sector. In Business, Markets and Government in the Asia Pacific: Competition Policy, Convergence and Pluralism, Wu, R. & Chu, Y. (Eds.) (pp. 300-321). London: Routledge. Retrieved June 11, 2011, from Questia database:]

The only international airport in Thailand, and the country's principal airfield, is at Don Mu'ang, 20 miles north of Bangkok. Adjacent to the Thai Air Force headquarters, it has a modern commercial passenger terminal built and operated by the Government. The field is connected to Bangkok by modern bus service over an excellent highway. Don Mu'ang is connected by international air flights directly to Penang, Singapore, Medan (Sumatra), Djakarta, Phnom Penh, Saigon, Manila, Hong Kong, Vientiane, Rangoon, Calcutta, and Colombo, and by connecting flights to all the world's principal cities[footnoteRef:12]. [12: Brown, D. (1996). The State and Ethnic Politics in Southeast Asia. New York: Routledge. Retrieved June 11, 2011, from Questia database:]

Thai Airways Company, Ltd., a Government-sponsored airline, maintains regular domestic flights from Bangkok to important towns in North, Northeast, and peninsular Thailand. In 1956, Thai Airways entered the international field with a weekly flight from Bangkok to Singapore. The International Cooperation Authority provided $78,000,000 in 1956 for extension of airports at Nakhonsawan and Nakhonratchasima (Khorat) and has granted funds for a United States airline to assist Thai Airways in improving and extending their services. It has recommended that the Thai Government concentrate upon domestic service, withdraw from unprofitable international service, and expand the Don Mu'ang field to accommodate jet flights of the major airlines. In 1960 Thai Airways merged with SAS into Thai International Airways, serving Southeast Asia, from Calcutta to Singapore and Saigon[footnoteRef:13]. [13: Brown, D. (1996). The State and Ethnic Politics in Southeast Asia.]

Irrespective of the origin and crucial need of an adequate transportation system, precisely the need and demands of the Thai population has resulted into a bifurcation of the Thai air busses into high cost and low cost market segmentation. The Thai airways as mentioned is the most authentic rather the most subtle and internationally recognized air rout. But on the other hand the models of airlines of Nok Air, Bangkok Airway and Thai Air Asia are relevant to the presented research, and the relative strategic measures for the improvement of the low cost airline in Thailand[footnoteRef:14]. [14: Canto, V.A. & Laffer, A.B. (Eds.). (1990). Monetary Policy, Taxation, and International Investment Strategy. New York: Quorum Books. Retrieved June 11, 2011, from Questia database:]

Significance of Study

The study signifies the importance of established and good quality, effective airlines in the countries like Thailand that relies much on the revenue it generates from the tourism. The rich and dense culture of the county makes it the attraction of the tourist from across the globe.

The airline industry presents an inconsistency over time, technology and consumers preferences.

Thailand experienced an exceptionally high rate of economic growth between 1985 and 1996 due to the dynamic growth of urban manufacturing, tourism and the service industry. The booming economy was growing by 8% a year in the late 1980s, and even 6.4% in 1996. Thailand is now facing a financial crisis of major proportions, and did not even reach its revised projection of 0.6% growth in 1997. Land prices soared in the boom years, and developers overextended themselves, building condominiums and housing estates for the new urban middle class. Banks and finance companies were stuck with huge foreign loans to these developers, at the same time that the central bank was no longer willing to prop up the local currency (baht). Investors, local businesses, and consumers all suffered after the currency was allowed to float in July 1997[footnoteRef:15]. This is calculated annually for the world's airlines by the International Civil Aviation Organization (ICAO)[footnoteRef:16]. [15: Wu, R. & Chu, Y. (Eds.). (1998). Business, Markets and Government in the Asia Pacific: Competition Policy, Convergence and Pluralism. London: Routledge. Retrieved June 11, 2011, from Questia database:] [16: Culpan, R. (2002). Global Business Alliances: Theory and Practice. Westport, CT: Quorum Books. Retrieved June 11, 2011, from Questia database:]

Nature of Research

The research is inductive and exploratory in nature.

The research ids regarded inductive in its nature because the outcomes of the research and generated from the available fact. By reconciling and reevaluating the known variables the research becomes inductive. The outcomes of the research are generalized to the entire industries of Thailand.

The exploratory nature of the research refers that the research is proceeded using the available data and the entire purpose of the research is focused to the strategic improvements in the low cost airlines of Thailand

Data Sources

The data is collected using the secondary sources and government statistics of Thailand.

Research Problem

The paradox of high growth yet poor profitability is amply illustrated by the experience of Thailand's major scheduled international airlines which are the low cost airlines designed mainly for masses rather than elites[footnoteRef:17]. [17: Culpan, R. (2002). Global Business Alliances: Theory and Practice]

There is no simple justification of the obvious disagreement between the airline industry's rapid growth and its marginal and recurring profitability. But, for the individual airline, overcoming this contradiction means matching supply and demand for its services in a way which is both efficient and profitable. This is the essence of airline management and planning[footnoteRef:18]. [18: Deitz, S.R. & Thoms, W.E. (Eds.). (1991). Pilots, Personality, and Performance: Human Behavior and Stress in the Skies. New York: Quorum Books. Retrieved June 11, 2011, from Questia database:]

To be successful in this an airline can be a low-cost operator or a high-cost operator. An airline, within any regulatory constraints, can itself determine the supply of services it offers in the various markets it serves. In turn, the way it organizes those services and manages the inputs required to supply those impacts directly on its costs.[footnoteRef:19]. [19: Deitz, S.R. & Thoms, W.E. (Eds.). (1991).]

Research Questions

The basic research questions that will be catered in the entire research are:

1. The need of improvement in the low cost airlines

2. What is the present quality level of the low cost airlines of Thailand?

3. How do the low cost airlines position themselves in the mind of the Thai consumers?

4. The actual need of low cost airline in Thailand?

5. The impact of technological advancements on the low cost airline of Thailand?

6. The human resource needs to fulfill the agenda of the low cost airline?

7. The level required by the low cost Thai air industry to reach the economies of scale?

8. Can the Southwest Airlines model suit the Thai culture and preference of low cost airlines?

Variables under Study

The research will study the relationship of chief variables including the profitability of low cost airlines… [END OF PREVIEW]

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Cite This Thesis:

APA Format

Low Cost Airline in Thailand.  (2011, June 17).  Retrieved March 23, 2019, from

MLA Format

"Low Cost Airline in Thailand."  17 June 2011.  Web.  23 March 2019. <>.

Chicago Format

"Low Cost Airline in Thailand."  June 17, 2011.  Accessed March 23, 2019.