THAI grounds 12 more planes to cut costs amid slump in demand

[webfact]

THAI grounds 12 more planes to cut costs amid slump in demand

By THE NATION

 

 

Thai Airways International Plc (THAI) is grounding 12 planes to reduce operational cost amid the Covid-19 situation.

 

The airline’s flight demand has fallen by some 30 per cent, Cherdphan Chotikhun, executive vice president of THAI's Technical Department, said.

 

The 12 planes to be grounded under this plan are: three Airbus A380s -- to be grounded for seven months; six Boeing 777-200s -- to be grounded from Monday (March 16) onwards and will not be recommissioned; an Airbus 330-300 HS-TEU, which has been grounded since March 10; an Airbus 330-300 HS-TES and a Boeing 777-300 HS-TKE -- both will be grounded from Friday (March 20) onwards.

 

“The Boeing 777-200s will not be used again as they have high maintenance cost up to Bt1 billion,” he added.

 

This plan will raise the total number of THAI jets grounded to 24; 12 planes were earlier grounded for engine maintenance, resulting in the company having 54 planes in operation from the 80-strong fleet.

 

“Grounding the planes will help the company save on engine depreciation fee, which is usually at $600-$900 or Bt17,000-2,800 per flight hour,” said Cherdphan. “We will also save expenses on crews, pilots and ground services for these planes.”

 

Last Friday (March 13), the Civil Aviation Authority of Thailand (CAAT) asked the Civil Aviation Board to consider measures proposed by airlines suffering the effects of the Covid-19 outbreak.

 

One proposal is for a 50-per-cent reduction till the year-end in fees charged for landing, parking, office rentals and other services. Others would see the two-week process for approving requests for flight adjustments shortened and passenger-service charges halved to encourage more people to fly.

 

Source: https://www.nationthailand.com/news/30384179

 

-- © Copyright The Nation Thailand 2020-03-16

Follow Thaivisa on LINE for breaking Thailand news and visa info

[Fex Bluse]

If THAI fails, that will be good for the Thai people.

[CGW]

8 minutes ago, Fex Bluse said:

If THAI fails, that will be good for the Thai people.

THAI failed years ago! doubt it would make the slightest difference to the "average" person here?

[colinneil]

So grounding 12 more planes will save on expenses of pilots crew, ground crew.

What about cutting a lot of the top heavy management, and save millions every day?

[CanuckThai]

"The 12 planes to be grounded under this plan are: three Airbus A380s -- to be grounded for seven months; six Boeing 777-200s -- to be grounded from Monday (March 16) onwards and will not be recommissioned; an Airbus 330-300 HS-TEU, which has been grounded since March 10; an Airbus 330-300 HS-TES and a Boeing 777-300 HS-TKE -- both will be grounded from Friday (March 20) onwards.

“The Boeing 777-200s will not be used again as they have high maintenance cost up to Bt1 billion,” he added."

 

See what happens if you drive it, like you stole it?  

[RichardColeman]

Thai could - but wont - come out with great credit if they did one simple thing. Make a commitment to the tourists and travellers of the world here they would ensure cheap escape' flights for all , no matter what airline you arrived on. This would then be seen as a caring attitude.. They could liase with countries to help them and get worldwide promotion. But the wont, they will just close shop, complain and drain more money

[CGW]

1 hour ago, RichardColeman said:

ensure cheap escape' flights for all

Where too? 

[White Christmas13]

4 minutes ago, CGW said:

Where too? 

Italy ????

[CGW]

2 minutes ago, White Christmas13 said:

Italy ????

Ideal, change planes in Iran ????

[gimo]

     Plenty of info re how many and specific types of planes  being grounded , but what about specific routes that will be 

 cancelled or reduced in number ?

[new2here]

3 hours ago, colinneil said:

So grounding 12 more planes will save on expenses of pilots crew, ground crew.

What about cutting a lot of the top heavy management, and save millions every day?

Yes.. quite a bit actually. The pilots contract invariably has language that allows for RIFs (Reduction In Force) and depending on what the contractual language says, they may be able to target those who are type rated to the impacted fleet.  Cabin crew and technical department staff would also be a savings. 

So yes, on the personnel side, there will be some real savings on the Labour side by this move.  In addition, if they are just accelerating the removal of a fleet type then that also adds another layer of cost savings as well. 
 

Sure, reduction of management salaries would also help ... pretty much any labour costs removed would be a plus at this point in time.

 

i think given what the situation appears to be today and in the short term, TG is going to have to make some pretty drastic cuts ASAP.  I’d be looking at cutting back on cabin staffing - moving to minimum onboard staffing levels.. trim onboard catering and move to a more simplistic service... temporarily shuttering lounges at selected line stations... closing at least temporarily all City Ticket Offices (CTOs)... and a wholesale draw down in terms of the current operating schedule.. freezing all non-essential non-capital spending, a company-wide hiring freeze... things like this.

 

To me, making changes to fares, in an attempt to bump up bookings/revenue in the short term I think is a non-starter as I suspect that they’re looking at negative bookings (more net cancellations compared to net new bookings)... as I see it, there’s little appetite for new travel bookings right now.

 

Currently as I see it, Thai is in a triage scenario.. they need to do what they possibly can just to make it until the either the end of Q3 or even Q4 in a reasonable level of finances, operations and cash flow/burn.

 

 

[wjhall]

This plan will raise the total number of THAI jets grounded to 24; 12 planes were earlier grounded for engine maintenance, resulting in the company having 54 planes in operation from the 80-strong fleet.

 

 

Not exactly true as Thai already had 54 planes in storage so by my reckoning they have at least 78 planes grounded. 

[Srikcir]

5 hours ago, colinneil said:

So grounding 12 more planes will save on expenses of pilots crew, ground crew.

What about cutting a lot of the top heavy management, and save millions every day?

THAI will be leasing three Boeing 777-300ERs to be delivered by end of 2020. May want to cancel that order. Also now on hold is purchase of 38 new aircraft but plans are for deliveries between 2021 and 2026, maybe should also reconsider delaying delivery further. 

[Sir Swagman]

2 hours ago, gimo said:

     Plenty of info re how many and specific types of planes  being grounded , but what about specific routes that will be 

 cancelled or reduced in number ?

TG utilisation of airframes was always less than desirable. Removing aircraft from active service should have been done before this downturn.

[ParkerN]

7 hours ago, webfact said:

“Grounding the planes will help the company save on engine depreciation fee, which is usually at $600-$900 or Bt17,000-2,800 per flight hour,” said Cherdphan. “We will also save expenses on crews, pilots and ground services for these planes.”

 

deleted

 

 

Edited March 16, 2020 by ParkerN

[Finspin]

Thai airlines.. please don’t ground the LHR-BKK leaving tonight. Have an urgent appointment in the Billabong on LK Metro.

its a religious celebration in honour of St Patrick 

[scorecard]

3 hours ago, new2here said:

Yes.. quite a bit actually. The pilots contract invariably has language that allows for RIFs (Reduction In Force) and depending on what the contractual language says, they may be able to target those who are type rated to the impacted fleet.  Cabin crew and technical department staff would also be a savings. 

So yes, on the personnel side, there will be some real savings on the Labour side by this move.  In addition, if they are just accelerating the removal of a fleet type then that also adds another layer of cost savings as well. 
 

Sure, reduction of management salaries would also help ... pretty much any labour costs removed would be a plus at this point in time.

 

i think given what the situation appears to be today and in the short term, TG is going to have to make some pretty drastic cuts ASAP.  I’d be looking at cutting back on cabin staffing - moving to minimum onboard staffing levels.. trim onboard catering and move to a more simplistic service... temporarily shuttering lounges at selected line stations... closing at least temporarily all City Ticket Offices (CTOs)... and a wholesale draw down in terms of the current operating schedule.. freezing all non-essential non-capital spending, a company-wide hiring freeze... things like this.

 

To me, making changes to fares, in an attempt to bump up bookings/revenue in the short term I think is a non-starter as I suspect that they’re looking at negative bookings (more net cancellations compared to net new bookings)... as I see it, there’s little appetite for new travel bookings right now.

 

Currently as I see it, Thai is in a triage scenario.. they need to do what they possibly can just to make it until the either the end of Q3 or even Q4 in a reasonable level of finances, operations and cash flow/burn.

 

 

Thai also has way too many cabin crew, many at or approaching best by date.

 

One example, after 5 years service (number needs checking ), ground crew get a draft personal schedule for the next several months then have the absolute right to accept of reject whatever flights and also accept / refuse flights because they don't like the departure etc., time.

 

Therefore needing a very large pool to ensure they can put together a crew for each flight, plus they get enormous salaries and very large allowances, all adds up.  

 

 

[anto]

Airlines in trouble World wide.Ryanair to ground 80% of its fleet from April.

[ubon farang]

14 hours ago, colinneil said:

So grounding 12 more planes will save on expenses of pilots crew, ground crew.

What about cutting a lot of the top heavy management, and save millions every day?

Cant do that Col. The company might go broke

[geriatrickid]

12 hours ago, RichardColeman said:

Thai could - but wont - come out with great credit if they did one simple thing. Make a commitment to the tourists and travellers of the world here they would ensure cheap escape' flights for all , no matter what airline you arrived on. This would then be seen as a caring attitude.. They could liase with countries to help them and get worldwide promotion. But the wont, they will just close shop, complain and drain more money

The time to  get out was a few weeks ago.

[hotchilli]

16 hours ago, colinneil said:

So grounding 12 more planes will save on expenses of pilots crew, ground crew.

What about cutting a lot of the top heavy management, and save millions every day?

Unthinkable !

[Laughing Gravy]

Deleted wrong thread.

Edited March 17, 2020 by Laughing Gravy

[Laughing Gravy]

7 hours ago, anto said:

Airlines in trouble World wide.Ryanair to ground 80% of its fleet from April.

I have sympathy with the airlines but Ryanair are the leeches of the skies.

[steven100]

Why the fak can't you just admit you are just about bankrupt !!   turn off the lights then close the door behind you.

Thailand .....  you can spin any situation the way you want to make it all sound good .... 

[steven100]

7 hours ago, anto said:

Airlines in trouble World wide.Ryanair to ground 80% of its fleet from April.

airlines have been ripping the world travelers off for years ... 

they deserve everything that's coming to them.

[CharlieH]

Bating post and response removed.

[steven100]

14 hours ago, new2here said:

Currently as I see it, Thai is in a triage scenario.. they need to do what they possibly can just to make it until the either the end of Q3 or even Q4 in a reasonable level of finances, operations and cash flow/burn.

I believe your statement is incorrect ...

They cannot do as you imply just to make it until the end of Q3 & Q4.

I would expect it is up around 260 billion by now ...

 

'an informed source in the Transport Ministry said that THAI’s debt crisis was very serious and puts the carrier at risk of bankruptcy, with its combined total debt amounting to about 245 billion baht,'

Thai Airways International and its affiliates incurred a net loss of 12.017 billion baht last year, that’s 448 million baht more than the year before. The airline has been accumulating losses year on year for over a decade.

 

I doubt they will see christmas.  imo

 

 

 

 

 

Edited March 17, 2020 by steven100

[scorecard]

53 minutes ago, steven100 said:

I believe your statement is incorrect ...

They cannot do as you imply just to make it until the end of Q3 & Q4.

I would expect it is up around 260 billion by now ...

 

'an informed source in the Transport Ministry said that THAI’s debt crisis was very serious and puts the carrier at risk of bankruptcy, with its combined total debt amounting to about 245 billion baht,'Never mind someone from Thai will sson remind us that their Puff and Pie shops are ma

Thai Airways International and its affiliates incurred a net loss of 12.017 billion baht last year, that’s 448 million baht more than the year before. The airline has been accumulating losses year on year for over a decade.

 

I doubt they will see christmas.  imo

 

 

 

 

 

 

Never mind, someone from TG will soon remind us that their Puff and Pie  (P&P) shops are making a profit and they will bail out the whole 245Billion debt (but will need 500 years).

 

But I just wonder what TG resources P&P use to make and sell their bakery products. If they do then their claims of making a profit are false and fake news.

 

 

Edited March 17, 2020 by scorecard

[justin case]

maybe they can AXE some useless managers, oh no, the boss said he would but then came back

 

hub of flip flop

 

hahaha, the only way THAI can save money is by NOT TO FLY

 

great management

[Chelseafan]

5 hours ago, steven100 said:

airlines have been ripping the world travelers off for years ... 

they deserve everything that's coming to them.

In what way ?