Business Units

The Company’s business units supporting THAI’s air transport business included Cargo Terminal Handling Services, Ground Customer Services, Ground Equipment Services and Catering Services. Details were as follows

Cargo Terminal Handling Services

The Company had a policy to consistently increase service quality and develop products that met quality standards at every service point by taking into account of customers’ needs and suggestions to ensure their utmost satisfaction. The Company undertaken the Build Up project to provide cargo loading services operated by the Company’s employees instead of exporter’s representatives, thus enhancing customers’ satisfaction and ensured the Company’s efficient safety management in line with international standards. The Company also relocated the office building that was previously located in the Cargo Terminal area to a new location. The relocation of the office building increased extra storage space of up to 650 square meters. At the same time, the Company was in the process of increase more vertical storage space to operate cargo terminal at full capacity. Moreover, the Company consistently adhered to the policies, goals and procedures to be in line with the certification of IATA’s Safety Audit for Ground Operations (ISAGO).

With its strong commitment to transport service improvements, the Company eveloped the area of the Perishable Center (2,000 square meters) near the truck dock into a temperature-controlled area through the use of Cool Chain Management System by controlling temperature specifically during transportation to enhance the capacity to handle an increased number of the products that were in great need and increase an opportunity for market expansion of perishable goods. In addition, the Company developed its employees’ skills by encouraging employees to attend the Good Distribution Practice (GDP) course to provide air transportation services for medical supplies in accordance with the WHO’s GDP standard.

For the transportation of goods requiring special care or temperature control and higher use of tools and equipment than the general products such as perishable goods, the Company had in place a Temperature Control or ULDS Blanket to handle cargo requiring temperature control from the warehouse facility until the delivery at the destination, thus ensuring special care of cargo throughout the whole process.

A new information and communication system, called as “CHORUS” to replace the existing system “ORCHIDS), was also developed to increase its competitiveness, enhance the operational efficiency, achieve the highest customer satisfaction and respond to the customer’s need. The Company is currently in Phase 2 of the development with the three newly-developed systems in place, including:

  1. The Claim Management: a system to manage all claims
  2. The Revenue Planning System (RPS): a system to support the Company’s transportation analysis and sales planning
  3. The MISBO system: a system to assist the report making and data analysis for the executives to analyse, make plans and make decisions.

Moreover, the Warehouse Automation System was developed to link the data of all devices in the cargo to CHORUS as a tool to help enhancing the efficiency of cargo management and reducing the errors of cargo operation process. CHORUS was expected to be fully functional by the end of 2018. Tablets were also used in the cargo operation process to reduce the errors during transportation and increase efficiency in cargo management.

Ground Customer Services

With over 50 years of experience in providing full ground handling services beginning from the early days at Don Mueang Airport, THAI has developed a capability in providing services for all aircraft types. Although the Company has relocated its operation to Suvarnabhumi airport, THAI remains the provider of ground handling services as authorized by the AOT under the contract number Tor Sor Por.1-47/2006 with 34 years term of contract starting from September 28, 2006 to September 27, 2040

Additionally, the Company has always been authorized by international airports in the region, such as Chiang Mai, Hat Yai, Phuket Krabi and Chiang Rai to provide ground handling service. The agreement contracts to provide ground handling service at these airports are still under the authorization process by the AOT, except Krabi International Airport which is under the authorization of Department of Civil Aviation.

Passenger Services: consisting of check-in services for tickets and travel documents, issuance of boarding pass, checking for pre-requested meals or special requirements, along with luggage check and weighing, plus outbound boarding gate services include verification of travel documents and managing aircraft boarding procedures while facilitating passenger disembarking from the aircraft.

Lounge services: for its First Class and Business Class passengers, Platinum and Gold Royal Orchid Plus card holders. An access to THAI’s Royal Orchid Spa was reserved for THAI’s First and Business Class passengers. Also the Exclusive Service was another lounge service for passengers travelling in groups.

Luggage services: tracking of lost luggage, repairing or compensating for damaged luggage along with luggage delivery in case of late luggage arrival, tracking and retrieving of on-board forgotten items. Loading and Unloading

Load control and weight balance services: consisting of weight calculation planning, load control and the loading and unloading of passenger luggage as well as cargo and mail.

Support services: consisting of the provision of assistance to transit passengers and passengers affected by TG flight delays and other issues to avail the smoothest, safest and the most convenient travel to their destinations. Services included a coordination with government agencies and state enterprises such as Immigration, Customs and Department of Airports, and special services such as special service for VIPs, First Class passengers (advance First Class check-in via phone calls), Business Class passengers, Platinum and Gold card members (special check-in counter) along with passengers with special needs such as elderly passengers, passengers with disabilities, doctor approved medical patients and passengers under 12 years of age travelling alone, etc.

Special Services for other private companies (Non- Customer Airline services): rendering special services as per agreed terms for customers of banks and private companies needing to give their customers special convenience, for example, travel assistance, lounge service, and other services.

Customer Airline services: involving passenger and baggage service, load control and weight balance services along with lounge and special services as per the agreement.

Marketing and Competition

The marketing policy of the Ground Customer Service Department focused on increasing the Company’s market share at Suvarnabhumi Airport competing with two other competitors. The Ground Customer Service Department currently serves 38 customer airlines with 36% market share while the other two competitors and the airlines operating their own ground handling services hold 56% and 8%, respectively. The airlines operating their own ground handling services are the Company’s new potential customers.

With only one competitor each in Chiang Mai, Hat Yai, Phuket, Krabi and Chiang Rai airports. The Company holds more than 80% of the market share. Demand at Phuket Airport is strong coming from seasonal air traffic, chartered airlines as well as low-cost carriers who are increasing in numbers.

Ground handling services as requested by the airlines to be rendered at domestic airports will be based on the facilities at a given airport, related agencies engaging in services facilitation as well as special assignment flights as in line with the AOT’s Don Mueang International Airport Utilization Policy, implemented since 2014, which is deemed to be an opportunity to expand ground equipment services at Don Mueang Airport and to increase overall revenue.

Procurement of Products and Services

Workforce was one critical factor affecting ground customer services at all airports. The lack of workforce was mainly due to the aviation business growth which urged workforce in the aviation industry or business seek higher returns from other airlines or even workforce flow to other industries offering a bit higher or lower wage rates but being free from persistent fatigue caused by work shifts and work pressure. In essence, both the Company and its competitors were affected by this situation.

In dealing with this issue, the Company resorted to outsourcing and out-jobs, and employed part-time workers to sufficiently serve customers at every airport. The Company also converted outsourced workers of Wingspan Services Company Limited, in which the Company held shares, to contract workers to ensure them job security for these people.

Ground Equipment Services

Ground Equipment Service was granted approval from the AOT to provide ground equipment services under the agreement number Tor Sor Por.1-50/2006 for a period of 34 years starting from September 28, 2006 to September 27, 2040.

For more than 55 years of experience and expertise in ground equipment services, the Ground Equipment

Services Department has been providing its services to all aircraft types belonging to both the Company and customer airlines.

Types of services consist of the following:

In addition to the services mentioned above, The Ground Equipment Services Department had a capacity to maintain ground service equipment and Unit Loading Devices (ULD) as certified by Civil Aviation Authority of Thailand.

The services operated by the Ground Equipment Services Department passed the safety standard assessment from the IOSA (by the standards of the IATA), quality standard assessment from ISO 9001, aviation security standard assessment of Transportation Security Administration, Department of Homeland Security (TSA) and Office of Transport Security (OTS) of Australia. These standard approvals ensured customers’ confidence in the safety and security of services provided.

In addition to ground equipment service operation at Suvarnabhumi Airport, the Ground Equipment Services Department also provided services at 10 regional airports, namely Don Mueang, Chiang Mai, Chiang Rai, Phuket, Hat Yai, Krabi, Udon Thani, U-Tapao, Khon Kaen, and Surat Thani Airports. However, if the airports other than those mentioned above were in need of ground equipment services, such as VVIP and VIP flights operated by the aircraft of Royal Thai Air Force and Hajj flights at Narathiwat Airport, the Ground Equipment Services Department could use ground equipment from Suvarnabhumi Airport or nearby airports to provide services at its full capacity.

Marketing and Competition

Ground equipment services at Suvarnabhumi airport has one competitor. The Ground Equipment Services Department currently serves 52 airlines accounting for 46% market share, while the competitor has 53% share, and 1% held by airlines with their own ground equipment service. The Ground Equipment Services Department continuously provides services to both existing customers and potential customers by incorporating information from both complaints and satisfaction survey in the process of analyzing and defining work plans to deliver standard services and highest satisfaction to the customers.

When approaching new customers, the Ground Equipment Services Department takes advantage of its strengths and potential in its standard staff training and its control unit with the capability to make decision under normal situation and in emergency to make the customers confident in taking our services.

Procurement of Products and Services

Key factors in providing the ground equipment service are equipment and workforce. In terms of equipment, a ground equipment services fleet plan was put in place to cater for the Company fleet and the customer airlines to ensure availability of up-to-date equipment that was most cost effective. In terms of workforce, the Company outsourced and provided theoretical and practical training to the outsourced workers according to the airport standards and international standards and developed existing workers’ multi-skill capability to increase efficiency in ground equipment services and ensure an adequate number of workers and the optimal levels of capital. The Ground Equipment Services Department also arranged a team of engineers to conduct studies and supply advanced technology equipment suitable for the area of work and the aircraft of all types such as the electric towing tractor under the Green Airport Project that served to save operating cost and conserve the environment at the same time.

Catering Services

THAI Catering Service has always been a successful part of the supporting business units. It has yielded profits for more than 10 years. It operates from 2 bases as follows:

THAI Catering is a leader in the production of food and service to airlines with flights departing from Suvarnabhumi Airport by serving more than 70,000 flights per year and producing more than 70,000 sets of meals a day. The proportion of raw materials purchased is 72% domestic and 28% imported raw materials.

THAI Catering’s food processing and catering services were certified according to international standards recognized by the IATA and the WHO consisting of the Quality Management System (ISO 9001: 2015), the Hazard Analysis and Critical Control Point (HACCP), the Good Manufacturing Practice (GMP) certification, all of which were integrated into the Quality-Hygiene-Safety (QHS) system. THAI Catering was also certified by the Halal & Hal-Q, OHSAS 18001, the Occupational Health and Safety Management System (OHSAS 18001) and the Environmental Management System (ISO 14001)

With its international standards and over 50 years of experience in its catering services, THAI received several international awards and accolades, namely the Best Economy Class Onboard Catering from Skytrax; Gold Prize Best Middle Haul Caterer Award of 2014 from All Nippon Airways (ANA), Japan; Excellent Catering Service Award for 3 consecutive years, namely Gold Award in 2015 and Silver Award in 2014 and 2016, from EVA Air (BR), Taiwan; Outstanding Catering Performance Awards 2016 from Air Macau (NX); and Best Inflight Food 2017 from IFSA Compass Awards. These international awards are a testimony to the quality and service and a pride for THAI Catering.

Despite THAI Catering being inevitably affected by the global economic slowdown, political uncertainty, several crises including rising operating costs and raw material prices, the commitment and dedication of all THAI’s Management and employees made strategic changes in marketing approach and operating procedures to cope with the challenges faced by the Company. Meeting the challenges, THAI Catering expanded its customer base and production capacity while also developing authentic Thai frozen food products serving some return routes, growing the number of its bakery outlets, cutting expenses to reduce operating costs, controlling the energy use to reduce electric/water expenses and introducing the “Lean Management” to streamline operating expense and lower the overall operating cost. The restructuring of the cost structure to better meet the challenges of competition and a good part of this cost improvement was through reducing waste and loss from raw materials enabling THAI Catering to continue to post a positive bottom line.

Other Businesses

The Company also had other air transport support businesses which included aircraft maintenance services, dispatch services, onboard duty free sales and souvenir sales. Details were as follows:

Aircraft Maintenance Services

Aircraft maintenance is carried out by THAI Technical Department to secure aircraft maintenance activities for THAI fleet. The mission starts as from having the aircraft entered into THAI fleet up until phasing out with an objective to keep the aircraft always airworthy with highest safety standard and compliance with all governing rules and regulations of the Civil Aviation Authority of Thailand (CAAT) as well as rules and regulations of any other organizations that THAI has committed to be binding to under the agreed terms. Apart from serving aircraft of THAI’s fleet, Technical Department of THAI also renders maintenance services to other operators. All in all, safety and security are the key factors for which THAI Technical team operating under.

The primary mission of THAI Technical consists of the following maintenance:-

  1. Line Maintenance: This mandatory task is to perform maintenance of the aircraft at every time after each flight and classified in package of work as transit at transit, turnaround and night stop. This service is to perform at the apron area of all airports where THAI flies to, not only at Bangkok International Airport.
  2. Light Maintenance: Aircraft is to be maintained on interval based on utilization in terms of flight hours/flight cycles or calendar days. THAI Technical is capable to accommodate this type of light maintenance at facilities in Suvarnabhumi, Don Mueang and U-Tapao bases as well.
  3. Heavy Maintenance: In addition to Light Maintenance, the aircraft is to undergone heavy maintenance to totally check the whole airframe, engine, component and accessory. Facilities to accommodate this task are at Suvarnabhumi, Don Mueang and U-Tapao bases subject to repair station approval granted by CAAT.

In order to be entitled to conduct all the above maintenance as stated, THAI Technical has met all qualifications defined by the Civil Aviation Authority of Thailand (CAAT). In addition, THAI Technical is recognized and accepted among aviation industry as repair station certified by Federal Aviation Administration - FAA and European Aviation Safety Agency - EASA apart from many other authorities that considered THAI Technical as their repair stations.

Ad hoc services are also tasks of THAI Technical; i.e. exterior aircraft painting, aircraft wash that would cause end result of environment saving above targeted objective of fuel consumption save. This type of services is introduced at Suvarnabhumi and Don Mueang bases.

Aircraft maintenance needs high cost of operations in order to maintain the personnel, supplies, repair shops and tools to always be standardized. It also needs constant development to always be updated with the fast-changing aviation technology for the passengers and the aircraft users taking services from the Technial Department to meet the highest convenience and safety.

Transport Support Services

Transport support services consisted of dispatch services, onboard duty free sales, and souvenir sales.

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