T'way Air is expanding business-class seat supply on Southeast Asia routes. Business-class seats have so far mainly been operated on long-haul routes served by widebody aircraft. Reflecting seasonal demand, the airline is pulling widebodies from lower-demand regions such as Europe and increasing deployment on Southeast Asia routes.
On the 19th, the airline industry said T'way Air recently introduced business fares for widebody operations on routes from Incheon to Cebu in the Philippines, Chiang Mai in Thailand, Cam Ranh (Nha Trang) and Noi Bai (Hanoi) in Vietnam, and Kota Kinabalu in Malaysia.
T'way had mainly used the B737, which has no business-class seats, on those routes. It created the fares so it can deploy medium and large aircraft with business class, such as the B777 and A330.
On the Incheon–Kota Kinabalu route, it has deployed the A330 for certain periods since last month. It will deploy the A330 on the Incheon–Cebu and Incheon–Nha Trang routes from mid-next month. The timing for A330 deployment on the Incheon–Chiang Mai and Incheon–Hanoi routes has not yet been finalized.
Deploying widebodies on Southeast Asia routes is a strategy to respond to the travel off-season. The airline is cutting flights to Europe, where seasonal demand declines more sharply, and assigning spare aircraft to Southeast Asia routes, where passenger declines are relatively smaller.
T'way Air reduced its Germany Frankfurt route, which had been operated with the A330, from seven times a week to three times a week early this month. Based on last year, the decline in paid passengers in winter (November–March) versus summer (April–October) on this route was 44%, larger than the overall decline of 33%.
By contrast, Noi Bai, Cam Ranh, and Kota Kinabalu recorded declines in the 20% range, and in Chiang Mai's case, winter passenger numbers were counted as 7% higher than in summer. During the same period, the passenger decline on the Cebu route was 38%.
If T'way Air deploys widebody jets on Southeast Asia routes, the aircraft currently assigned to those routes are expected to be used on newly launched routes. T'way Air began operating the Busan–Fukuoka and Busan–Sapporo routes late last month, and will launch service on the Jeju–Fukuoka route starting on the 20th of next month.
If T'way Air deploys widebodies on Southeast Asia routes, it will gain a differentiator compared with other low-cost carriers (LCCs). Southeast Asia routes are core for LCCs, but many other LCCs either do not have widebodies or, even if they have business-class seats, do not assign them to these routes.
A T'way Air official said, "By deploying large aircraft equipped with Business Saver and economy seats, we aim to provide more convenience to travelers heading to Southeast Asia, where winter demand is strong."
Meanwhile, T'way Air posted an operating loss of 95.5 billion won in the third quarter of this year, marking six consecutive quarters of losses. In August, to resolve capital impairment, the company raised as much as 200 billion won through a rights offering and perpetual bond issuance, and also carried out a capital reduction without consideration to reduce its accumulated deficit.
T'way Air had expected its debt ratio to fall to 247% through the capital raise and capital reduction, but after logging a large loss and increasing its deficit, its debt ratio stood at 4,457% as of the third quarter of this year.