THAI needs to modify its rehabilitation plan to survive: Sumet

[phkauf]

6 hours ago, GinBoy2 said:

It's even worse than just the price.

 

My wife last night booked a ticket back to Thailand from the US to visit for the New Year.

 

Even though our local airport is served by United, a Star Alliance partner, TG won't even quote it.

 

Now with United, half the flight is on other alliance partners, notably none of it being on TG!

I have the same issues with United not able to connect with Thai when I try to buy a ticket. Instead of TG to HK and then United to EWR, I need to fly ANA to Narita and then United to EWR. But if I tried to book with miles, I will see the TG flight option. I think it has something to do with TG and Thailand not in compliance with US FAA regs. Partly why TG cannot fly to the US at the moment.

But in any case TG is hopeless at this point. They are behind in so many areas and the competition is relentless.

[Bangkok Barry]

13 hours ago, tso310 said:

As I put in another thread, 40% less aircraft than Singapore and 40% more staff. Think of the number of staff freebies tickets that are on the money earning flights to Europe.

 

What are those numbers, and what is your source?

[paddyfield7]

The management does not need to be reviewed, it needs to be entirely replaced, including the board. The free flights for MP's, officials, monks and Hi-So's should be stopped immediately. The fleet should be reduced and harmonized. And as long as THAI's business fares to Europe are almost the double of promotion fares of better airlines (SIA, Cathay Pacific), they will never ever make any money. To reduce "unnecessary expenses" by 10 % is a bad joke - with common sense, unnecessary expenses should be 0 (zero)! It seems that the word "unnecessary" needs to be explained to them, it is just not needed.

[Bangkok Barry]

13 hours ago, PatOngo said:

How can an airline within a country of 68 million get to such a state? Meanwhile, not too far away in a country of 26 million: The Qantas Group has achieved an Underlying Profit Before Tax of $1.30 billion and a Statutory Profit Before tax of $1.27 billion for the Financial Year 2019.

 

 

 

And Singapore, with a population of just 5.6 million, made over $1.06 million profit with growth from all regions to which they fly.

[moe666]

A few years ago they had a president running Thai who actually cut the debt but they fired him for some trumped up charge and it has been down hill every sense

[dr_lucas]

57 minutes ago, munchlet said:

Name me a state airline that makes money? 

Singapore Airlines 

[dallen52]

With a Debt -v- equity ratio like that and ROI not that great, I would be turning the lights off and closing the doors.

(We did it to the Australian automotive industry)

 

A respected Japanese mentor I had at Denso, said.

No business with no profit, is better than a business with no profit...

[Dustdevil]

14 hours ago, PatOngo said:

How can an airline within a country of 68 million get to such a state? Meanwhile, not too far away in a country of 26 million: The Qantas Group has achieved an Underlying Profit Before Tax of $1.30 billion and a Statutory Profit Before tax of $1.27 billion for the Financial Year 2019.

 

 

Perhaps too much Southeast Asian and Middle East competition concentrated in a small area? Especially Air Asia, Malaysian, Singapore Air, Cathay Pacific, EVA; then further afield there's Qatar, Emirates, Etihad and some newer mainland Chinese ones such as China Eastern. Australia is far removed from these locations geographically, but, yes--Qantas also has significant competition going in and out of Australia.

[mikebell]

14 hours ago, RotBenz8888 said:

Well, they can't save more on the food, as it cant get cheaper than it is. I suggest they give up as sell the damn company to someone ready to take some responsibility.

Sell it to Air Asia.  Tony Fernandes will turn it around.

[hotchilli]

15 hours ago, snoop1130 said:

Thai Airways (THAI) needs to modify its rehabilitation plan if it is to survive in the face of tight competition, especially since it still has a total debt of over Bt2.45 billion and losses of more than Bt20 billion, despite being able to reduce its debts by Bt48 billion over the past five years.

If it weren't for government financial help as a private company it would have gone under years ago.

 

[fruitman]

19 hours ago, tso310 said:

As I put in another thread, 40% less aircraft than Singapore and 40% more staff. Think of the number of staff freebies tickets that are on the money earning flights to Europe.

Not only the staff, their partners fly cheap as well.

[fruitman]

19 hours ago, TallGuyJohninBKK said:

 

How much fuel could they save if they simply stopped all the flight attendants from sneaking back imported luxury goods hidden within their clothing and bags?  

 

Hey come on now, don't ruin my source of taxfree cigarettes.

[Guest]

The word of the day is "Competition."  
I used to fly Thai ... then tried Air Asia.  100% of my flights with them have cost less and left on time. Not a single delay or cancellation.  
Pretty simple to solve that riddle.

[tgeezer]

Why do they publish the figures?  

[Magenta408]

One hell of a scam for something that has been in ICU since 1996. Give it up. 

[George Aylesham]

obviously debt servicing is a huge drag on any return to profitability but the strong baht should provide some slight relief as the airline's most important expenditure is on fuel - priced in US dollars.

[bbbbooboo]

Hmmm...reducing their airfares for what used to be quite a good service would probably help. But TIT. Also changing their xenophobic attitudes towards us "aliens"(via immigration)would help by increasing "aliens" visiting Thailand,but I doubt this will happen in 5 lifetimes. Som Nom na?

[Fex Bluse]

3 hours ago, mikebell said:

Sell it to Air Asia.  Tony Fernandes will turn it around.

Khun Tony. 

Him not the Thai people. 

Thailand not need the foreigner. 

Can do "dtua eng" by ourself na. 

[Sir Swagman]

17 hours ago, PatOngo said:

In all honesty, how were those debts acquired?

Well, ‘in all honesty’ that isn’t how they were acquired 

[PatOngo]

10 minutes ago, Sir Swagman said:

Well, ‘in all honesty’ that isn’t how they were acquired 

Jolly good answer Swagman.

[Montnoveau]

17 hours ago, realfunster said:

 

I assume this is supposed to be debts of Bt 245 billion ?

 

 

38 new aircraft for USD 50m ?

 

As usual in a Thai press report, few of the numbers actually make any sense or stand up to more than half a second of critical thinking...

Yes, 50 million USD will get you half a 737-800.

[laocowboy2]

17 hours ago, PatOngo said:

How can an airline within a country of 68 million get to such a state? Meanwhile, not too far away in a country of 26 million: The Qantas Group has achieved an Underlying Profit Before Tax of $1.30 billion and a Statutory Profit Before tax of $1.27 billion for the Financial Year 2019.

 

 

And this leaves aside the fact that Qantas is very much a 'last stop' airline. Singapore benefits from being a transit hub - and so could BKK. Emirates built an entire airline on its geographical position. For Qantas the only potential customers to the south are penguins - which makes their performance all the more noteworthy.

[GinBoy2]

This one of those stories that will still be going long after all of us are 6ft under.

 

Debt, revenue, incompetence, where does the list end when it comes to this company?

 

It's a zombie company, it's debt makes unsellable, no rational business would take that level of debt, and that in my mind at least is the absolute killer in this equation.

 

The fleet. TG has an obsession with buying a mish mash of aircraft. Most airlines have a balanced fleet of purchased and leased aircraft, which gives them flexibility should business conditions change. That changes the balance sheet from fixed asset depreciation to operating expense.Which is good, so long of course that you can generate operational revenue to cover expense, which TG seems to have a problem with. 

 

They also seem to believe that buying new aircraft, which adds to that structural debt is a panacea.

 

Delta is a classic example of how to milk existing resources. It may not be  young, it may not be pretty, but it's paid for! So whatever revenue you make is all going to the bottom line without having to service debt. One of several reasons they are consistently one of the worlds most profitable airlines.

 

As for employees, let's compare Lufthansa. Germany, a country roughly the same size as Thailand, and you could argue that Frankfurt is a hub similar to Survarnaphumi.

 

Their revenue is similar to Delta, but with the largest number of employees of any of the top 10 airlines, in a high wage area, yet they still seem to be capable of being one of the most profitable airlines in the world.

 

The bottom line is that is not one, even two or three simple answers to the woe's of TG. 

 

In any real world business, it would be time to 'put a bullet in it"

 

 

 

 

Edited October 16, 2019 by GinBoy2

[PatOngo]

17 hours ago, laocowboy2 said:

And this leaves aside the fact that Qantas is very much a 'last stop' airline. Singapore benefits from being a transit hub - and so could BKK. Emirates built an entire airline on its geographical position. For Qantas the only potential customers to the south are penguins - which makes their performance all the more noteworthy.

It's a good thing penguins can afford the fares!

[Montnoveau]

25 minutes ago, GinBoy2 said:

The fleet. TG has an obsession with buying a mish mash of aircraft. Most airlines have a balanced fleet of purchased and leased aircraft, which gives them flexibility should business conditions change. That changes the balance sheet from fixed asset depreciation to operating expense.Which is good, so long of course that you can generate operational revenue to cover expense, which TG seems to have a problem with. 

The mixed fleet is no doubt the result of all the bribes paid, I have no other explanation.

[natway09]

You cannot compare Qantas to Thai as population of Thailand has far less spending power.

Yes, need to get rid of the deadwood, it's chequered career has seen the upper echelon of Ministries & Governments over the years assuming they can use & abuse their positions with Thai. This must stop. eg; If the foreign ministries use Thai (which they should where possible)

the Foreign Ministry are charged & have 30 days to pay the invoice like any normal business,

Stupid decisions like buying 5 or 6 A 340"s just so the could fly direct to New York must also stop. (The powers that be should be chastised heavily for this as just because SA was doing it they wanted to, ) without any real feasibility studies.

There are none so blind as those who do not want to see so until they take off the blinkers & just make pure business decisions, nothing will change.

On a personal note I use Thai a lot & I think it is able to be returned into a great airline, (the infrastructure is in place) but needs an experienced non Thai CEO working with the board & given the clout to cut through red tape, ignoring the old cronies

 

[Bastos60]

19 hours ago, RotBenz8888 said:

Well, they can't save more on the food, as it cant get cheaper than it is. I suggest they give up as sell the damn company to someone ready to take some responsibility.

they could start by offering higher quality meals on long-haul flights as payable options and reduce the quantity of the standard meals. It worked for KLM to bring in extra revenue and keep the ticket prices low. 

Transform to a fully automated booking platform where the best seats can be bought at competitive prices, move passengers after takeoff so to fill the empty rows giving people in full rows more leg room. (It is something I hated when they started doing this at KLM but it didn't miss its effect)

Included Thai specific gadgets, trinkets or memorabilia to first/business class.  Offer premium video services on planes, make the latest releases available during flight at competitive prices. 

Sell unsold seats in a sort of last minute auction with decent starting price. KLM tried this for getting all their business seats sold but wasn't a great success. It might fare better for economy seats though.

And the list can go on with extra options that travelers more likely are willing to pay extra for. 

[scorecard]

6 hours ago, maddermax said:

The only way to get more passengers is to provide an appropriate service which is sadly lacking at present. A more modern fleet may help.

Duty free is not the way forward as most passengers do not buy the goods and it costs money to carry them.

And he mentioned more money from food sales etc., no doubt he meant puff and pie which is profitable but compared to flight operations the revenues and profit contributions are very tiny.

 

If I was a conglomerate owner and one of my companies was near bankrupt and in very serious massive debt and the the paid CEO of the company was spending time on tiny unrelated side businesses, things like 'puff and pie', I would sack him/her on the spot. 

 

 

Edited October 16, 2019 by scorecard

[Mises]

"The airline is also considering long-term goals such roping in more passengers by offering greater benefits to Royal Orchid Plus members"

 

Does he not realise that Thai Air vastly reduced the benefits to Royal Orchid members as from 1st October?

This was announced months back and some people immediately switched to other airlines except for redeeming all accumulated miles on Thai prior to October 1st. So in the last 6 months or so less sales but more free award flights.  Has the penny dropped?

 

My thoughts are as ever that Thai Air is a great airline despite its senior management.  Complaints about the food are nonsense, Thai Air has won awards for food in Economy.  I've tried them all Phuket to Bankok to London and Thai is the best. Emirates is ok but the lengthy stop halfway is a killer for me.

[Andycoops]

22 hours ago, PatOngo said:

How can an airline within a country of 68 million get to such a state? Meanwhile, not too far away in a country of 26 million: The Qantas Group has achieved an Underlying Profit Before Tax of $1.30 billion and a Statutory Profit Before tax of $1.27 billion for the Financial Year 2019.

 

 

Because it's state run and Qantas is a private enterprise. 

Just look at Alitalia etc.