Why Patee believes his return to aviation will be a Really Cool experience

“I had to do something new and innovative, otherwise why would I waste my efforts to come back," he said in an exclusive interview with The Nation, explaining the motivation behind his return.

 

New business model

Patee made headlines in March 2023 when he announced the launch of his "Really Cool Airlines", a new Thai carrier designed to meet the exponential growth in travel demand.

The airline, he says, will redefine the future of the aviation industry, by making a difference and showcasing a new potential business model for the airline industry.

The concept was distilled from his decades of experience and learning in the industry, he says.

Patee served as the first CEO of Thai budget airline Nok Air from 2004 to 2017. Despite his retirement from the position, he remained active in the industry as an adviser, offering behind-the-scenes assistance.

"What I've learned from my experience, as well as looking at the current state of the aviation industry, is that airline cycles are heavily influenced by factors beyond your control, such as weather, politics, economics, fuel prices, and financial. However, in terms of revenue, the airline is entirely dependent on two factors. One is on the passenger side, and the other is on the cargo side," he says.

He explains that the two elements were directly involved with aviation. So, when aviation suffers from an uncontrollable cause, everything comes to a halt.

When this cycle occurs, airlines are forced to fire employees, reduce aircraft leasing, and do whatever is necessary to avoid bankruptcy.

"This cycle is never ending. The worst was the Covid pandemic, when every single airline suffered the same fate, with all of their fleet completely frozen on the ground, not for two weeks, but for three years, putting the industry on the verge of collapse," he says.

Even though the pandemic has ended, airlines continue to face the same old challenges, such as a lack of aircraft to meet demand, a shortage of crew, high fuel prices and environmental concerns.

"It's a cat and dog thing, but once you have the plane, it will be profitable for sure because demand outnumbers supply, driving up ticket prices. The only issue is the industry itself. People don't learn that the pandemic actually killed the business," he says.

He explains that if an airline relies on a single source of revenue, it will experience the same cycle and problem when an uncontrollable incident occurs.

"This is why I am back here. I have come to do something different. I am here to change and modify the business strategy so that we can reduce risk by bringing in revenue from other non-aviation tools into our airline," he says.

 

Why it’s Really Cool

Patee began to carve out a unique identity for his new venture, beginning with the name of the airline.

The name is not only memorable, but also a catchy phrase.

"Really Cool is an adjective; it could be anything, right? Really cool rooms, really cool dudes, really cool taxi, really cool whatever. So the word allows us to use the brand in other forms of revenue," he says.

His decision to use Really Cool as an airline name has proved, as its brand awareness has grown around the world from the first day it was unveiled, on March 22 last year.

"So, in other words, I don't have to spend money explaining the word Really Cool. It's just one. It's Really Cool Airlines. We now have to provide the really cool products in order to match the understanding of what 'really cool' means," he says.

He acknowledges that living up to the really cool image will be a challenge. However, he believes that this challenge could be met through creativity, innovation and technology.

He assures that his Really Cool Airlines will have firsts in many aspects, and cites some of the initiatives.

"We have a lot of new ideas. Our innovation is divided into booking system aspects. We will speak with the first AI booking avatar. This has never been done before in the history of the world. We created this new prototype. We are the first in the world to do this," he points out.

The move, he says, will help reduce call centre costs. The AI booking avatar is available in 40 languages and can reach anywhere at any time.

A luggage delivery service is another example. He claims that Really Cool is the first airline in the world to send suitcases directly from the home to a passenger's hotel at the destination.

This type of delivery design has already been implemented by the airline in Japan, at both Narita and Nagoya.

"It's really cool delivery, right? If this one works, then we can use this model across to everywhere we fly," Patee says.

Patee believes that Really Cool is the world's first airline to use AI technology for in-flight services.

"It is just the beginning, but there will be much more. This is an example of perspective. I'm referring to the other part of the revenue. I won't reveal it today because it's not yet finished, but it's very cool and unique for sure," he says.

He highlights that under this business model, it will generate revenue across the platform in such a way that it will be scalable across the board.

 

Time for growth and profit

As an industry insider, he is confident that the aviation industry will continue to grow regardless of economic uncertainties and global slowdowns.

The demand for travel does not diminish, but rather increases year after year, he explains as the rationale for his optimism.

The competition will heat up as all airlines are scrambling to find new planes to meet the demand and launch new routes.

Patee explains that due to the COVID pandemic, two major aircraft manufacturers, Airbus and Boeing, had to halt production. As a result, resumption of their full operations will take time, which means new aircraft will not be available before 2029-2030.

Meanwhile, the supply of used aircraft for lease is currently very limited, and some of them require time for inspection and maintenance, he says.

With rising travel demand, anyone who can lease a plane and provide air travel services will almost certainly profit, he says.

"Once you have the plane, it [the airline] will be profitable for sure because the ticket price is so high," he says, adding that Really Cool's charter flight to Japan in March or April has already been fully booked even before the airline has acquired the plane.

"Everybody is ready to take our charter flight," he says.

Currently, Really Cool has leased four Airbus aircraft. Bookings for scheduled flights will open in the third quarter of this year.

"I can imagine people asking if they can have a seat. People are already asking me to get a Really Cool booking because they want to see if it's cool or not. That's good for me. Of course, people want to see if it's really cool, right?" he says.

 

Increasing profitability

According to the International Air Transport Association (IATA), airline profitability is expected to improve in 2023 and then stabilise in 2024.

Net profit of the airline industry is expected to reach US$25.7 billion in 2024. The figure will be slightly better than the expected $23.3 billion in 2023.

Meanwhile, operating profits are expected to increase from $40.7 billion in 2023 to $49.3 billion in 2024. Total revenues are expected to rise 7.6% year on year to a record $964 billion this year.

When asked what is the revenue target for Really Cool Airlines, Patee says revenue and profit are only one aspect of an airline's success.

"I don't think it's necessary. The viability of a company's overall success or failure is dependent on a variety of factors, including its employees, team, brand, and the products and services it provides. Financial is a part of it. But the overall picture has to be good," he says.

 

More alliances, not competition

With the commitment to provide a better experience, Patee emphasises that Really Cool Airlines is entering the market as a partner of all domestic airlines, including Thai Airways, rather than as a competitor.

He says its ticket prices will be comparable to those of Thai Airways.

"We will never undercut the price. We are not competing with Thai Airways. We don't have to as this world is big enough. We want to make sure that we help bring the passengers to Thailand," he said.

He reiterates that his mission as the CEO of Really Cool Airlines is to bring people to the country and support domestic allies.

"We'll bring in passengers and transfer them to the domestic market. We will pass them on to AirAsia, Bangkok Airways, and whoever is in the swimming pool. The return of tourists means the revival of our country,” he says.

"The biggest competition for us is us," he adds.

Really Cool Airlines is a proposed long-distance airline based in Thailand. Currently, the company has secured a 1-billion-baht investment budget for operations with four leased aircraft this year — two wide-bodied Airbus A330-300s in the first half and two A350s.

According to its roadmap, Really Cool will fly on routes in the Asia Pacific starting with Japan before expanding to Europe in 2025.