Asia's Boutique Airline
A Conversation With … Capt. Puttipong Prasarttong-Osoth, President and CEO, Bangkok Airways
Every airline needs sales, and so do we. But our principle has always been ‘people.’
— Capt. Puttipong Prasarttong-Osoth
In the late 1960s, a number of companies were engaged in oil and natural gas exploration in the Gulf of Thailand. To support this development, Sahakol Air launched charter service in 1968, using two-engine, nine-seat Trade Wind aircraft. During the next two decades, the Kingdom of Thailand experienced significant growth in tourism and business investments, contributing to the need for increased air transportation.
To more efficiently transport the Kingdom’s several million overseas visitors a year, in 1986, charter carrier Sahakol Air became Bangkok Airways, the country’s first privately owned domestic airline.
Today, the airline operates scheduled flights to nine major domestic routes, as well as international routes to Myanmar, Laos, Cambodia, Vietnam, Malaysia, Singapore, China and Japan. It has also invested in building and maintaining its own privately operated airports at Samui, Sukhothai and Trat, providing Thailand with more air transportation hubs to facilitate increasing air traffic volumes.
During the celebration of the airline’s 36th anniversary in 2004, Bangkok Airways introduced a new campaign, “Asia’s Boutique Airline: Exclusive Service To Exotic Gems,” to strengthen its brand and further position it as a credible, trustworthy airline while maintaining a modern, trendy boutique-like character. The airline’s objective was to offer the best personalized service to passengers, as well as develop more exotic and cultural destinations.
In addition, when the government of Thailand implemented the open-skies policy, an influx of airlines entered the market. To effectively compete and secure a firm foothold in the markets it served, Bangkok Airways had to differentiate itself from the competition.
To do so, Bangkok Airways established five distinguishable pillars: boutique lounges; boutique airports; appetizing menus; friendly, exclusive service; and new, modern aircraft.
Simply put, we will maintain our exclusive services and expand our codeshare partner list.
The airline’s clean, comfortable boutique lounges are similar to business-class lounges offered by other airlines. However, Bangkok Airways’ lounges are available to all passengers with no extra charge or hidden fees. Each lounge has a courtesy corner where passengers can treat themselves to a variety of free snacks and hot or cold drinks. Free Internet access is available at several computer booths, and a kids’ corner is designed to entertain and satisfy the needs of young children.
The airline also offers exclusive Blue Ribbon Club Lounges for passengers flying its new business-class service (Blue Ribbon Club) or as part of its Boutique Premium Service for passengers who are FlyerBonus premier members.
Blue Ribbon Club Lounges differ from current boutique lounges, offering a more extravagant design with hanging crystal chandeliers and a cozier atmosphere, as well as greater personalized service. Additional amenities, such as hot meals and a personal shower room, provide a high-quality experience. A quiet, intimate library, which can be used as a personal meeting room, offers passengers more privacy. In the near future, the Blue Ribbon Club Lounges will be equipped with massage services.
Bangkok Airways owns and operates three￼boutique airports — Samui, Sukhothai and Trat. Each airport’s unique architecture blends with the natural and cultural surroundings of the province in which it is located.
Samui Airport’s open-air, thatched terminal buildings blend seamlessly with the tropical gardens and coconut groves of Koh Samui. Sukhothai Airport, situated among the calm rice paddies, reflects traditional Thai architecture. Trat Airport highlights the essence of the province’s surrounding natural environment.
Variety Of Food
From lounge snacks to in-flight meals, passengers flying on Bangkok Airways don’t have to be concerned with food choices. Full-course meals served onboard are prepared and delivered with the highest level of food-safety standards. Special dietary menus, such as vegetarian or Halal, are also available. And on longer flights, passengers are given different meal choices.
Ensuring passengers arrive safely at their destination is Bangkok Airways’ primary concern, which is why the airline maintains a modern aircraft fleet. Each aircraft’s service time in the airline’s fleet never exceeds five years before it is returned and replaced with a new one.
Bangkok Airways’ aircraft, which comprises eight ATR 72-500s, 10 Airbus A319s and five Airbus A320s, are also decorated with colorful liveries of its various exotic and cultural destinations, enhancing the airline’s trendy boutique feel.
Bangkok Airways wraps up its boutique experience with hospitality and personal touches that accompany passengers from the time they book their tickets to their safe arrival at their destinations. “Friendly service with a smile” describes the airline’s unique personality that optimizes the joy of flying and brings a sense of humanity back to air travel.
Bangkok Airways operates 23 modern aircraft including eight ATR 72-500s, 10 Airbus A319s and five Airbus A320s. Because passenger and crew safety is of top concern, the airline maintains a modern fleet by which an aircraft’s service time does not exceed five years before it is replaced with a new one.
To succeed in today’s competitive aviation industry, Bangkok Airways has outlined numerous key goals and objectives to ensure its customers receive a superior experience that differentiates it from competitors. In a recent interview with Ascend, Bangkok Airways CEO Capt. Puttipong Prasarttong-Osoth discusses his airline’s unique characteristics and how differentiation is essential for long-term success.
Question: Why was your “Asia’s Boutique Airline: Exclusive Service To Exotic Gems” campaign important for the growth and stability of your airline? What results has it achieved?
Answer: Bangkok Airways has been a credible, trustworthy airline for a number of years. However, in 2004, we felt that we needed to reposition it as a clear contender in the markets it serves. So we launched the campaign to foster that goal. We provide exceptional services that include free lounge access to all of our passengers, in-flight meals in every sector and so on. We needed to reiterate to the traveling people what we do, who we are and how we treat our passengers. The campaign really strengthened and rejuvenated Bangkok Airways, as well as positioned it as a strong competitor.
Q: Customer retention is essential to a successful airline, especially in today’s competitive environment. What assets set your airline apart from competitors and drive customer loyalty?
A: It has to be our exclusive services, which our employees in every sector do their best to provide with true passion. Also, Bangkok Airways’ fares are not that different from other airlines, even low-cost carriers, but our passengers receive an array of standard amenities.
Q: One of your key objectives is to invest in and foster the growth, development and commitment of your employees. Why is this important to the success of your airline? What strategy have you put in place to support this objective?
A: Bangkok Airways has achieved great success and has become the airline it is today because it believes in giving its best to passengers. To do so, we need good, efficient employees. Last year, we launched a new campaign that shows our passion in every area across our business. This was a core-branding campaign for 2014 that promoted our award-winning and well-respected service by the public.
Q: You aim to achieve a targeted, sustainable profit margin that will surpass all other Asia-Pacific airlines. What are some of the ways you plan to achieve this goal?
A: Simply put, we will maintain our exclusive services and expand our codeshare partner list.
Q: Bangkok Airways maintains a fleet of new, modern aircraft. How do you offset the cost of continuously adding new aircraft to your fleet?
A: We work with leasing companies to manage our fleet’s age, which enables us to control the age of our aircraft, whereas buying new aircraft requires substantial investment.
Bangkok Airways’ Trat Airport
Trat Airport, which was built by Bangkok Airways, has a single runway and an open-air terminal that highlights the spirit of the province’s surrounding natural environment.
Q: Bangkok Airways offers its customers “friendly, exclusive service.” What do you mean by “exclusive”? How does your level of service give your airline a competitive advantage?
A: By “exclusive,” we mean providing extra services, such as free lounge access and in-flight meals, without charging fees. We go that extra mile. We want to focus on our passengers’ convenience and experience rather than pure revenue. Every airline needs sales, and so do we. But our principle has always been “people.” This makes us different from others, and this is, and always has been, the passion of Dr. Prasert Prasarttong-Osoth, the founder of Bangkok Airways. This is what makes us Asia’s Boutique Airline.
Q: Technology is a major necessity for the modern, competitive airline. In which areas of your airline is technology most crucial for a profitable, efficient operation?
A: Bangkok Airways has offered mobile applications for a number of years, enabling passengers to check schedules, as well as book and pay for tickets, using their mobile devices. We also recently introduced iPad applications for our Blue Ribbon Class passengers. In addition, our reservations system enables us to manage internal and codeshare data swiftly and efficiently. So those are all key areas where technology supports and helps drive success.
Q: During the last 10 years, what are some of the most significant changes your airline has made to effectively compete?
A:We have focused more on domestic passengers, new uniforms and new aircraft livery, as well as introducing Bangkok Airways mascots and expanding domestic routes. The introduction of Bangkok Airways mascots is intended to attract young travelers. As far as domestic expansion, we have been focusing on Thailand’s domestic routes since the Hamburger crisis and the following crisis in the European Union, which made us realize the unstable number of international tourists and the importance of the Thai market. Then we started to expand and add frequency to our domestic routes.
Q: Bangkok Airways has received an array of esteemed industry awards during the last several years, including Asia’s Best Regional Airline from Skytrax World Airline Awards and the United Kingdom’s Travel Agents Choice Award. What are the biggest contributing factors to these honors, and what will you do going forward to ensure your airline continues winning?
A: We offer exclusive services and provide more complementary products and services than most airlines do. We will do all we can to maintain these qualities and make improvements where necessary. We continually put our customers first, which earns us this level of recognition.
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One of the foremost contributors of Bangkok Airways’ success is its ability to recognize areas of improvement that will make significant impacts to its bottom line. For example, the airline realized that its current revenue integrity system was not returning near as many seats back for resale as it needed to. Therefore, aircraft were departing with a substantial number of empty seats, and inventory was not as clean as possible all of the time.
To address this shortcoming, Bangkok Airways’ leadership team spearheaded an initiative to find robust technology that would improve the revenue integrity function and salvage a good portion of the revenue lost from spurious bookings blocking inventory. In 2012, after an exhaustive search, the airline implemented an advanced real-time revenue integrity solution — Sabre® AirVision™ Revenue Integrity — that could substantially improve this part of its operation.
Moving from its previous daily batch robotic system, the clear expectation was to realize additional revenue from more seats returned. Based on a before and after analysis conducted by Bangkok Airways and Sabre Airline Solutions® , the upgrade to more advanced technology proved successful.
“Our new revenue integrity solution presents us with more than 40 percent more seats released back to sales year over year on average,” said Peter Wiesner, senior vice president of network management for Bangkok Airways. “We expected to see some improvement. However, this level of success surpassed our expectations.”
Returning seats back to sales does not create additional value for an airline unless some of these seats are resold to paying customers. It is common that the resale percentage (the likelihood of reselling the returned seats) is estimated in the range of 5 percent to 10 percent. Using an average seat value in a straightforward formula — Estimated Value = Seats Returned x Average Seat Value x Resale % — results in more than US$250,000 per month in additional value over and above what Bangkok Airways realized with its previous revenue integrity system.
“Sabre AirVision Revenue Integrity is really helping our bottom line,” continued Wiesner.
Ensuring the inventory is as clean as possible and seats are available to customers who genuinely want to fly is one of the main benefits of using real-time Sabre AirVision Revenue Integrity. However, additional before and after analysis revealed another important aspect for airlines to consider in terms of revenue integrity — hits by the revenue integrity system in terms of SSRs, actions (cancel name, cancel segment) and screen scraping on the reservations system.
Because Sabre AirVision Revenue Integrity absorbs both real-time booking and ticket feeds for airlines using SabreSonic® Customer Sales & Service (CSS), it is not searching for speculative bookings by screen scraping SabreSonic CSS (as a number of other revenue integrity robots do). Instead, the solution receives all new and changed bookings and only takes action back when suspicious bookings are found. The thought was that the message counts by agent sign hitting SabreSonic CSS (transactions by a particular agent sign) would actually drop versus the screen-scraping robotic systems, and this was also realized in the before and after analysis as can be seen in the graph above.
“We highly recommend that airlines using SabreSonic CSS and not using Sabre AirVision Revenue Integrity seriously consider making the switch,” Wiesner said. “It certainly benefited Bangkok Airways.”
Moving to the solution includes the additional benefit of improved airline control. Using a sophisticated Web user interface enables revenue integrity analysts to better control and change their business rules and processes themselves instead of contacting an external vendor or IT department to make changes. This means faster time to market for rule changing and no delay in adapting revenue integrity business rules to rapidly changing airline policies or sales promotions.
In the modern fast-paced airline world, control and speed of business rules change with technical solutions like Sabre AirVision Revenue Integrity, enabling an airline to react quickly to combat fraud.