Thai Airways finally improves Melbourne product by introducing A350s

Thai Airways has finally begun operating the A350 to Australia, following a one-year regulatory delay.

Thai Airways’ first A350 flight to Australia touched down in Melbourne on 1-Oct-2017. Thai Airways is now using the 321-seat two class A350-900 on one of its two daily flights to Melbourne. The airline is planning to begin operating the second Melbourne flight with A350-900s on 1-Feb-2018.

The first Melbourne flight was initially scheduled to transition to the A350-900 by the beginning of Oct-2016, while the second flight was expected to transition to the A350 a few weeks later. Thai Airways took delivery of its first A350 at the end of Aug-2016. At the time, Thai’s plan was to allocate the first two A350s – the second aircraft was delivered in mid Oct-2016 – to the Bangkok-Melbourne route.

However, in late Sep-2016, Thai pushed back the Melbourne A350 launch to 30-Oct-2016. In mid Oct-2016 Thai pushed it back further, to 1-Dec-2016. In Nov-2016 Thai pushed the Melbourne A350 launch back to at least Mar-2017. Subsequently, in Feb-2017, Thai postponed the launch of A350 flights to Melbourne for at least another five months.

As Blue Swan has previously analysed, the multiple delays were due to Thai’s inability to secure approval from the Civil Aviation Safety Authority (CASA) to operate the A350 to Australia. This was puzzling as adding a new aircraft type for a foreign airline already serving Australia is usually straightforward.

A350 launch customer Qatar Airways has been operating A350s into Australia since early May-2016. Singapore Airlines became the second airline operating A350s to Australia in Aug-2016. Cathay Pacific also now operates A350s to Australia.

See related report: Civil Aviation Safety Authority continues to delay Thai Airways from launching A350 in Australia…why?

The A350 significantly improves Thai’s product in the Melbourne market. In recent years Thai has used several 777 variants and 747-400s on the Bangkok-Melbourne route, with capacity fluctuating depending on the time of year. The A350 provides a better and more consistent product, particularly for corporate and business passengers.

Prior to 1-Oct-2017, Thai served Melbourne with 777-200s and 777-300s. The 777-200 flight was replaced with A350s on 1-Oct-2017, while the 777-300 flight will be replaced with A350s in early 2018. Thai’s A350s have slightly more seat capacity than its 777-200s but slightly less than its 777-300s. Therefore, Thai’s total capacity in the Melbourne market will be roughly the same.

However, the in-flight product is much better on the A350, particularly in business class. Thai has 32 lie flat business class seats on the A350 in an all aisle access 1-2-1 configuration. The 777-200 has 30 angle flat business class seats in a 2-2-2 configuration and the 777-300 has 34 angle flat business class seats in a 2-3-2 configuration.

With the upgrade of Melbourne to modern aircraft with a lie flat product, all of Thai’s South Pacific routes have now been upgraded, except Sydney. Thai began operating 787-8s to Perth in Sep-2014 and has consistently been using 787-8s on all flights to Perth, which was previously operated with A330-300s, since early 2015. Bangkok-Brisbane transitioned from older model 777s to 787-8s in Oct-2015 and has since also been consistently operated with 787-8s.

As Blue Swan recently highlighted, Thai Airways will begin deploying 787-9s to Auckland in Nov-2017. However, Auckland already has lie flat business class seats as it is served with relatively new 777-300ERs while older 777 variants, lacking a full lie flat product in business, have been used to Australia.

See related report: Competition in New Zealand’s international market is intensifying: Thai Airways goes daily with its new 787-9

Sydney is currently served with 11 weekly 747-400 flights. Thai’s 747s have angle flat seats in business in a 2-2-2 configuration although a full lie flat product is available in the first-class cabin.

Sydney has been in Thai’s tentative plans for the A350 since the aircraft was acquired. With CASA approval now in hand, Thai is likely to begin deploying the A350 on the Bangkok-Sydney route in 2018 as it takes delivery of the last five A350-900s from its initial 12 aircraft order. Thai could upgrade Sydney to double daily flights using the A350-900, resulting in relatively flat capacity compared to the current 11 747-400 frequencies but a much better product and schedule – particularly for corporate passengers.

While the local Australia-Thailand market has relatively limited corporate and premium demand, Thai offers connections from Australia and New Zealand to several key business destinations in Europe and India. As its European flights generally already offer lie flat business class seats, upgrading the product on Melbourne and Sydney results in a more competitive product on the Kangaroo route.