Login Signup
Verified Document

Study On Improvement Of Low Cost Airline In Thailand Dissertation Or Thesis Complete

Related Topics:
Airbus A380 Singapore Airlines Lufthansa Sky High Airlines
Open Document Cite Document

¶ … Low Cost Airline in Thailand The Study on Improvement of Low Cost Airline in Thailand

Geography of Thailand

Nature of Airlines

Variables under Study

The Profitability of Low Cost Airlines in Thailand

Thai Economy

Operating Results, Selected Airlines, Financial Year 1999

The Economies of Scale Attained By Airline Industry

Human Resource Practices

The future of low cost Thailand Airlines

Contrasting Qualities of State Owned and Non-State Owned Airlines

The Study on Improvement of Low Cost Airline in Thailand

Thailand is a global source for customers seeking cheap labor or material inputs. The country is rich in natural resources -- tin, rubber, natural gas, tungsten, and timber being a few examples. The country is a major source for agricultural products1a.

Thailand also has an abundant supply of low-skilled labor with high participation rates in the workforce 86% for males and 67% for females in 1995. At the same time, the country is the most developed in Southeast Asia, making for a relatively reliable work environment. In consequence, foreign companies use Thailand as a production base in labor intensive and light industries such as textiles, consumer electronics, and auto parts to serve their regional networks1B.

Thailand's comparative advantage of labor cost is, however, slowly eroding. The threats have come from the opening of China's and Vietnam's markets with their even cheaper labor sources. The minimum wage rate of Thai labor in 1996 was 135 baht (U.S. $5.40) per day, compared to $1.25 per day for MNCs in Vietnam and about $3.50 per day in China. The eroding comparative advantage in labor cost is aggravated by increasing electricity, water, and office operating costs. The severe devaluation of the currency in 1997 should improve Thailand's cost position1C.

Strategically, Thailand has a comparative advantage in size and location with its four international airports and two major seaports[footnoteRef:1]. [1: Aharoni, Y. & Nachum, L. (Eds.). (2000). Globalization of Services: Some Implications for Theory and Practice. London: Routledge. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=102764448]

One hope for Thailand is to increase its technological capabilities. The country suffers from a shortage of skilled managers, scientists, and engineers, with only 0.2 scientists and technicians per 1,000 people during 1988-92, compared with Korea (2.3) and Japan (7.0). In parallel, foreign MNCs seldom transfer much technology to the country. When MNCs engage in a production strategy, they normally limit it to one using low levels of technological sophistication. Recognizing these problems, the government has embarked on various programs such as expanding research and development, improving education, luring expatriate scientists and engineers' home, and attracting foreign direct investment in technological projects. It has also designated human resource development as a key factor in national development.The prospective role of Thailand as a lead country will be contingent on the success of this plan. Local companies are beginning to play a part. For example, Siew Company, the local joint venture partner of Matsushita, has embarked on a joint investment, PKS Development, with the Crown Properties Bureau and the NEP to make Thailand a transfer base of technology from Japan[footnoteRef:2]. [2: Pendleton, R.L. (1962). Thailand; Aspects of Landscape and Life (1st ed.). New York: Duell Sloan & Pearce. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=6505049]

The automotive industry yields a chief example of the Thai government's efforts at trade liberalization. While Thailand market is still regarded as a well protected car market, the government maintains to cultivate and retain liberalization efforts that were originally initiated in 1988. In October of the same year Thailand joined the ASEAN BBC (Brand-to-Brand Complementation) agreement. Since 1991, Thailand has undertaken unilateral measures to liberalize the automotive industry in an attempt to make itself the regional center for automotive assembly and components. The government significantly reduced high import duties on fully assembled cars in 1991[footnoteRef:3]. It also announced, in 1994, a tariff rebate of more than 90% on imported CKD (completely knocked down) car kits that would be re exported as assembled vehicles. The Board of Investment has expanded its promotional incentives for assembly plants to be located in provincial regions. These incentives include a 7 years tax discharge on income earned from exports, reduced duties on imported machinery, and government subsidies for construction, transport, and power.Auto manufacturers can also expect further relaxation in the local content requirements as the Thai government implements the agreement of World Trade Organization[footnoteRef:4]. [3: Alagappa, M. (Ed.). (1998). Material and Ideational Influences. Stanford, CA: Stanford University. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=35541491] [4: Sundbo, J. & Fuglsang, L. (Eds.). (2002). Innovation...

London: Routledge. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=108254053]
Owing to the extraordinary importance of the country and its tourist locations the state has devised the means of transportation for all categories of people and tourist, so that they can relish the aesthetic beauty of Thailand and at the same time the state can earn the quantifiable sum of money[footnoteRef:5]. [5: Asia Top Companies by Sales. (2000, June). Business Asia, 8, 38. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5001764374]

Geography of Thailand

Thailand is the one nation in Southeast Asia that was never colonized by European powers. This historical fact, proudly asserted by Thais, is often attributed to the Chakri administration's skills at compromise and negotiation. Thailand emerges as the space in-between British and French colonies. Lack of direct colonial experience does not mean that Thai modes of production were not shaped by external forces nor that there was no interference in the internal affairs of the Thai state. 'The French were reorganizing the country's legal system, the British its treasury and the Germans its army. In the nineteenth century, most commercial enterprises were in white hands and the rulers preserved independence by allowing colonial powers to exploit the nation and its resources (Copeland 1993:159). Thailand has the characteristics of a colonial state with an illegitimate military used as a resources of interior control rather than exterior fortification[footnoteRef:6]. [6: Thai Airways Sees Return to Profitability Starting Q3. (2009, August 18). Manila Bulletin, p. NA. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5031797291]

The internal reforms following the turn of the century were not sufficient to transform an absolute monarchy to a constitutional one, and in 1932 a small group of the allied coalition takeover and forced Rama VII to become Thailand's first constitutional monarch. Political changes and World War II strengthened efforts to develop a Thai national identity, and selectively borrow Western paths to modernity and progress. The military has had a great influence on Thailand through its involvement in the many coups and political crises since 1932. Through the 1950s and 1960s, Thailand was transformed from a subsistence based agricultural economy to a market-oriented rice economy and by the eighties, to an industrializing economy. While the Thai military with American support provided the stability to make this economic transformation possible, military ambitions had other consequences[footnoteRef:7]. [7: Thierauf, R.J. (1987). A Problem-Finding Approach to Effective Corporate Planning. New York: Quorum Books. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=29035447]

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. By October, the baht had fallen 40% in value. Higher prices and unemployment worsened the situation. The October 1997 collapse of the Thai financial markets prompted Prime Minister Chavalit Yongchayudh to remind investors that they should not leave a country. Other approaches to encourage investors to continue to support Thailand include promotional messages in the Thai Airways magazine, Sawasdee (November 1997:41): 'Those who look behind the headlines, however, are finding that Thailand's growing pains can mean substantial gains for investors. Out of the country's crisis, opportunity has arisen.' The government's mismanagement of the crisis increased political instability, resulting in the resignation of Prime Minister Chavalit Yongchayudh on 30 October 1997. The $17 billion (U.S.) bailout from the International Monetary Fund offered the country financial support, contingent on following a recovery plan that included checking inflation and reducing public spending such as halting the construction of Bangkok's $4.5 (U.S.) billion expressway[footnoteRef:8]. [8: Beirman, D. (2003). Restoring Tourism Destinations in Crisis: A Strategic Marketing Approach / . Crows Nest, N.S.W.: Allen & Unwin. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=102031189]

The new 'people's constitution' passed by parliament in September of 1997 began the process of political reform designed to deliver transparency and good governance and end corruption. One now needs a BA to be Member of Parliament, setting up…

Continue Reading...
Sources used in this document:
References

Aharoni, Y. & Nachum, L. (Eds.). (2000). Globalization of Services: Some Implications for Theory and Practice. London: Routledge. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=102764448

Alagappa, M. (Ed.). (1998). Material and Ideational Influences. Stanford, CA: Stanford University. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=35541491

Asia Top Companies by Sales. (2000, June). Business Asia, 8, 38. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5001764374

Beirman, D. (2003). Restoring Tourism Destinations in Crisis: A Strategic Marketing Approach / . Crows Nest, N.S.W.: Allen & Unwin. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=102031189
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: http://www.questia.com/PM.qst?a=o&d=5000843886
Brown, D. (1996). The State and Ethnic Politics in Southeast Asia. New York: Routledge. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=105562990
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: http://www.questia.com/PM.qst?a=o&d=28796999
Culpan, R. (2002). Global Business Alliances: Theory and Practice. Westport, CT: Quorum Books. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=101317664
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: http://www.questia.com/PM.qst?a=o&d=24381859
Dempsey, P.S., & Goetz, A.R. (1992). Airline Deregulation and Laissez-Faire Mythology. Westport, CT: Quorum Books. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=27417268
Dempsey, P.S., & Thoms, W.E. (1986). Law and Economic Regulation in Transportation. Westport, CT: Quorum Books. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=15418656
Dixon, C. (1999). The Thai Economy: Uneven Development and Internationalisation. London: Routledge. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=102878129
Dobson, A. (2002). Deregulation and Liberalisation of the Airline Industry: Asis, Europe, North America and Oceania. The Journal of Transport History, 23(2), 203+. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5035352053
Doganis, R. (2001). The Airline Business in the Twenty-First Century. London: Routledge. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=108443407
Doganis, R. (2002). Flying off Course: The Economics of International Airlines. London: Routledge. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=108443496
Dorraj, M. (Ed.). (1995). The Changing Political Economy of the Third World. Boulder, CO: Lynne Rienner. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=98132527
Elliott, J. (1997). Tourism: Politics and Public Sector Management. London: Routledge. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=103042436
Findlay, C., & Goldstein, A. (2004). Liberalization and Foreign Direct Investment in Asian Transport Systems: the Case of Aviation. Asian Development Review, 21(1), 37+. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5045076440
Findlay, C. & Warren, T. (Eds.). (2000). Impediments to Trade in Services: Measurement and Policy Implications. London: Routledge. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=105639464
Flood, T. (1975). The Thai Left Wing in Historical Context. Bulletin of Concerned Asian Scholars, 7(2), 55-67. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=97733091
Flouris, T., & Walker, T.J. (2005). The Financial Performance of Low-cost and Full-service Airlines in Times of Crisis. Canadian Journal of Administrative Sciences, 22(1), 3+. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5037572638
Goel, R.K. (1999). Economic Models of Technological Change: Theory and Application. Westport, CT: Quorum Books. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=23335245
Haites, E. (2009). Linking Emissions Trading Schemes for International Aviation and Shipping Emissions. Climate Policy, 9(4), 415+. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5045042116
High Flyers. (1998, November 2). Business Asia, 6, 4. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5001413563
Ingram, J.C. (1955). Economic Change in Thailand since 1850. Stanford, CA: Stanford University Press. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=61765885
Ingram, J.C. (1971). Economic Change in Thailand, 1850-1970. Stanford, CA: Stanford University Press. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=104796477
Kay, J.A. (1995). Foundations of Corporate Success: How Business Strategies Add Value. Oxford: Oxford University Press. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=29059159
Keeler, D. (2001, October). Thailand: Thai Airways Flies into More Turbulence. Global Finance, 15, 8. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5036303709
Lerda, V.G. (Ed.). (2002). Which "Global Village"? Societies, Cultures, and Political-Economic Systems in a Euro-Atlantic Perspective. Westport, CT: Praeger. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=101307846
Macavoy, P.W. & Snow, J.W. (Eds.). (1977). Regulation of Passenger Fares and Competition among the Airlines. Washington, DC: American Enterprise Institute. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=99978741
Montreevat, S. (Ed.). (2006). Corporate Governance in Thailand. Singapore: Institute of Southeast Asian studies. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=115974574
O'Connor, W.E. (1995). An Introduction to Airline Economics (5th ed.). Westport, CT: Praeger. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=27686992
O'connor, W.E. (2001). An Introduction to Airline Economics. Westport, CT: Praeger. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=101038330
Palmer, T.M., & Varner, I.I. (2007). A Comparison of the International Diversity on Top Management Teams of Multinational Firms Based in the United States, Europe, and Asia: Status and Implications. Singapore Management Review, 29(1), 1+. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5044889943
Pendleton, R.L. (1962). Thailand; Aspects of Landscape and Life (1st ed.). New York: Duell Sloan & Pearce. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=6505049
Shy, O. (2001). The Economics of Network Industries. Cambridge, England: Cambridge University Press. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=106154392
Sundbo, J. & Fuglsang, L. (Eds.). (2002). Innovation as Strategic Reflexivity. London: Routledge. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=108254053
Thai Airways Sees Return to Profitability Starting Q3. (2009, August 18). Manila Bulletin, p. NA. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5031797291
Thierauf, R.J. (1987). A Problem-Finding Approach to Effective Corporate Planning. New York: Quorum Books. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=29035447
Van Esterik, P. (2000). Materializing Thailand / . Oxford, England: Berg. Retrieved June 11, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=102366428
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: http://www.questia.com/PM.qst?a=o&d=105513503
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: http://www.questia.com/PM.qst?a=o&d=105513196
Cite this Document:
Copy Bibliography Citation

Related Documents

Essay
Low Cost / Full Service
Words: 4640 Length: 16 Document Type: Literature Review

At the same time, it will help to identify what issues will shape the future of air passenger transportation in Asia. 1.6: Hypothesis The introduction of LCCs in the North American and European markets started a trend that is beginning to unfold in Asia (with the birth of Asian-based LCCs). Part of this is in response to the increases in passenger traffic and the effects of globalization. However, there have been

Read More
Essay
Strategic Analysis of Virgin Australia Airlines: Following
Words: 2422 Length: 7 Document Type: Essay

Strategic Analysis of Virgin Australia Airlines: Following its merger with Pacific Blue, Virgin Australia that was previously known as V Australia rebranded to Virgin Australia Airlines. In addition to being the newest international airline owned by Richard Branson, Virgin Australia is headquartered in Sydney Airport. The airline company has developed an airline experience that is based on a simple idea in which flying is considered to something great. Virgin Australia Airline

Read More
Essay
U.S. Airline Industry Airline Industry Structure of
Words: 3159 Length: 10 Document Type: Term Paper

U.S. Airline Industry AIRLINE INDUSTRY Structure of the Industry Deregulation Act of 1978 US Airline Industry During the 1980s US Airline Industry During the 1990s The Next Decade for the U.S. Airline Industry Post 9/11 Bankruptcy Issue of Fuel Hurricane Katrina Future for the Global Airline Industry Airline Industry worldwide in general and United States in particular has played a central role in stirring the growth of the world economy. With USA appearing on the world map as one of the most

Read More
Essay
Starbuck's Case Study Briefly Describe
Words: 3967 Length: 14 Document Type: Term Paper

A fourth foundational element is the strength of the Starbucks brand itself and is ubiquity globally. As a result of rapid and well-defined strategies for opening up retail stores, Starbucks is now considered one of the most preeminent and strongest brands globally. Starbucks has generated the strength of their brand through combining high-quality coffee and tea beverages with the third-place concept to generate customer loyalty and world-of-mouth among customers and their

Read More
Essay
Internet and Global Finance Strategies
Words: 5161 Length: 20 Document Type: Research Paper

Internet and Global Finance Strategies Within the present competitive business environment, firms are continuously looking for various strategies to be ahead of their competitors and achieve competitive market advantages. Many firms have identified that internet technology is a powerful tool to enhance competitive market advantages. The traditional organizations have identified that internet is a powerful tool to deliver value to customer and presently, the internet technology has enabled firms to coordinate

Read More
Essay
Marketing Plan for Carnival Cruise
Words: 7624 Length: 20 Document Type: Marketing Plan

Ocean Village is UK-based and is uses the differentiated experience of offering families the opportunity to define their own cruise itinerary (Kwortnik, 2006). There is freedom as to when passengers will eat, what they choose to participate in, and the concept focuses on breaking out of the mold of highly predictable and regimented cruise programs. The two remaining brands, P&O Cruises Australia and the Yachts of Seabourn, each have

Read More

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now