Thai Airways may cut some plane types for good after grounding jets

[webfact]

Thai Airways may cut some plane types for good after grounding jets

 

FILE PHOTO: Thai Airways airplanes are parked at the tarmac of Suvarnabhumi Airport in Bangkok, Thailand March 25, 2020 REUTERS/Jorge Silva

 

BANGKOK (Reuters) - Thai Airways International Pcl <THAI.BK> may permanently reduce the number of aircraft types it deploys once the coronavirus outbreak that has caused the company to ground most of its fleet ends, said a senior government official on Monday.

 

Thai Airways is grounding 69 of its 82 jets following a drop in passenger volume and route cancellations from the increased border restrictions imposed by the pandemic, the state-owned airline said in a statement earlier on Monday.

 

The airline's board and management will come up with two plans by next month, the first to get the carrier through the coronavirus outbreak and another for business rehabilitation, Deputy Transport Minister Thaworn Senniam, the government official responsible for Thai Airways, said on Monday.

 

"The rehabilitation plan must be done fast because by October, if COVID subsides, we will need to deliver services to travellers and tourists," Thaworn said, referring to the respiratory disease caused by the coronavirus.

 

He added that sales and leasebacks of airplanes and other types of capital injections were being considered.

 

"We have to reduce aircraft types to as much as possible to reduce cost ... we can take out old aircraft, replace them with new ones through leasing or other procurement methods," he said adding the plans should be done by next month.

 

Thai Airways was already facing financial trouble, reporting losses since 2017. Losses in 2019 widened to 12.2 billion baht ($385 million) from losses of 11.6 billion baht a year earlier.

 

The coronavirus outbreak and the resulting travel restrictions limiting tourism in Thailand has exacerbated the airline's decline.

 

The government last week banned entry to foreigners and declared a state of emergency to combat the disease.

 

Thailand on Monday reported 136 new coronavirus cases, raising the total number of infections in the country to 1,524.

 

Nine people have died.

 

The flag carrier had cancelled nearly all of its international routes after its president resigned amid the outbreak.

 

The airline said last year it was reviewing long-delayed plans to purchase 38 jets for its expansion plan.

 

Other Thai airlines are also suffering amid the pandemic.

 

Regional carrier Bangkok Airways Pcl <BA.BK> said it was suspending 20 international routes and 10 domestic routes until October, with staff taking salary cuts of 10% to 50%.

 

Budget carrier Thai AirAsia is hibernating its fleet after suspending its international and domestic flights, its largest shareholder, Asia Aviation Pcl (AAV) <AAV.BK> said.

 

(Reporting by Chayut Setboonsarng; Editing by Christian Schmollinger)

 

-- © Copyright Reuters 2020-03-30

Follow Thaivisa on LINE for breaking COVID-19 updates

[rasmus5150]

Spending money they don't have to upgrade the fleet, in these Covid times.

 

Phew, I really hope they pull through - but this is a cutthroat market.

 

But I think that the airline "Norwegian" will collapse before TG.

 

Really hope that I'm wrong

[bangkokfrog]

This is the one chance the government has to finally sink this albatross without losing too much face. I sincerely hope they have the balls to do it.

[Wiggy]

3 minutes ago, bangkokfrog said:

This is the one chance the government has to finally sink this albatross without losing too much face. I sincerely hope they have the balls to do it.

The loss of face would be too big IMHO. Rarely does a government allow a flag carrier to fail. But it would be a good time for a complete overhaul. 

Edited March 30, 2020 by Wiggy

[scorecard]

Pick a plan, they must have developed at least 100 plans in the last few years.

[Misterwhisper]

It also might be a good idea to cut quite a few of over-salaried executive and board of director positions now the golden opportunity has arisen in the form of the virus outbreak. But then again, who is going to sack them? They certainly won't fire themselves.

[Assurancetourix]

Many aviation companies will remain grounded at the end of the Corona.
Thai will certainly be part of it unless it is really nationalized
But does that word exist in Thai?
which is likely to happen to other companies like Air France.
Low cost companies will also suffer enormously.
I think that in six months to a year when all this will be decanted, we will see another way of living;
low-cost travel will no longer exist; we will not return to the situation of the 50/60 years, but we should not be far from it.

[Basil B]

3 hours ago, Assurancetourix said:

Many aviation companies will remain grounded at the end of the Corona.
Thai will certainly be part of it unless it is really nationalized
But does that word exist in Thai?
which is likely to happen to other companies like Air France.
Low cost companies will also suffer enormously.
I think that in six months to a year when all this will be decanted, we will see another way of living;
low-cost travel will no longer exist; we will not return to the situation of the 50/60 years, but we should not be far from it.

As I understand Thai was going to retire 25 of its 80 planes by 2024, all its Boeing 747's and 18 of it 777,s maybe just speeding things up.

 

Many airlines will go to the wall but most of their planes will not be scrapped, and pilots and cabin crew will be looking for employment when this is all over.

[marko kok prong]

Not the bi-planes surely,please tell not the bi-planes,or the Dakota's.

[tjo o tjim]

Thai has always been a joke for the insane variety of aircraft they fly.  Getting rid of the 747s and 777s makes a lot of sense, along with the 380s.  They will be a better airline sticking to the 330, 350, and the 787, although they should have some 321s as part of their mainline strategy.

[Wiggy]

4 hours ago, tjo o tjim said:

Thai has always been a joke for the insane variety of aircraft they fly.  Getting rid of the 747s and 777s makes a lot of sense, along with the 380s.  They will be a better airline sticking to the 330, 350, and the 787, although they should have some 321s as part of their mainline strategy.

I think it's the old 777-200s & 300s they want rid off. They still have a number of relatively new 777-300ERs that they will want to keep. I agree with the 747s going as they should be in a museum. The A380s are uneconomical, but with the price of fuel as it is right now they might stay a little longer. I agree with the 321s as these would be a great regional aircraft.

 

https://www.planespotters.net/airline/Thai-Airways-International

Edited March 31, 2020 by Wiggy

[legend49]

4 hours ago, tjo o tjim said:

Thai has always been a joke for the insane variety of aircraft they fly.  Getting rid of the 747s and 777s makes a lot of sense, along with the 380s.  They will be a better airline sticking to the 330, 350, and the 787, although they should have some 321s as part of their mainline strategy.

Better is they got rid of all of them and let professional airlines worry about carrying PAYING passengers.

[ezzra]

They should change their logo to a flying white elephant.. no disrespect to other elephants dough...

[steven100]

16 hours ago, webfact said:

The flag carrier had cancelled nearly all of its international routes after its president resigned amid the outbreak.

The sooner it files for bankruptcy the better,  at least it will stop the bleeding .....

[steven100]

From what i read and if you consider the economic environment, this global recession will ultimately affect millions of workers worldwide who will lose there jobs.

 

Airline stewards 

Airline pilots

Hotel staff

Hospitality staff

Retail staff

Entertainment industry

Construction industry

Factory workers

Oil workers

Telecom workers

and many more ....

 

I believe anyone working in food production or healthcare will be the beneficiaries of this global downturn.

The COVID 19 virus may well recover within the coming 3-6 months,  however the fallout from it's economic effects will take years, possibly 2-4 years imo.

[scorecard]

15 hours ago, Misterwhisper said:

It also might be a good idea to cut quite a few of over-salaried executive and board of director positions now the golden opportunity has arisen in the form of the virus outbreak. But then again, who is going to sack them? They certainly won't fire themselves.

Agree, but overall the airline is massively overstaffed, so the reduction should be planned and with a goal; reduce staff, all categories/functions/roles to equal to a benchmark airline with comparable routes.

[madmitch]

17 hours ago, bangkokfrog said:

This is the one chance the government has to finally sink this albatross without losing too much face. I sincerely hope they have the balls to do it.

According to the newspaper I can't link to, Somkid has categorically stated that the government will not allow THAI to go under.

[realfunster]

49 minutes ago, madmitch said:

According to the newspaper I can't link to, Somkid has categorically stated that the government will not allow THAI to go under.

 

I have no burning desire to see it go under but by golly, the current situation presents an excellent 'face saving' opportunity for root and branch reform and restructuring.

 

Hopefully, this will be taken, I have my doubts though, as too many are feasting at this particular trough.

 

[Burma Bill]

Quote:-

Thai Airways may cut some plane types

for scrap metal?????

[Searat7]

Nine A-340 planes still stored at the various airports....would be 10 but the Royal Thai Air Force took one.  You have to look at the historic list on Planespotters to see all the stored planes not on the Active list. 

[ubon farang]

Sure they will drop some aircraft. The only thing they wont drop is there salaries. Thai airways was in trouble way before the virus. So i guess in this case the virus willl help them save face and downsize there bankrupt airline.

[Sydebolle]

Close down the shop, put professionals in and install a cashier on the way out of "Thai Airways Help Yourself Department Store". 

The elegant (liked the "sinking of the Albatross") way is to privatize the beehive of inefficiency and corruption, streamline and modernize the flag carrier to meet the challenges ahead in a "21st century manner". 

Possibly outsource the management to some alien, so done in the Middle East with airlines and Sony in Japan was ultimately also run by a non-Japanese. 

Thais have excellent abilities in many things. The way they run their National Carrier though is an utter embarrassing disgrace; one chairman after the other and one president after the other is "retired", "replaced" or "resigns". 

But ultimately I leave this question to the tax payers of Thailand, I neither pay taxes nor do I fly Thai Airways; one due to age and the other one due to any other alternative is better than Thai Airways International, going downhill ever since 1993 ???? 

[hotchilli]

19 hours ago, webfact said:

Thai Airways may cut some plane types for good after grounding jets

This is going to bankrupt a lot of small airlines, going to be a lot of redundant, cheap aircraft on the market soon!

[spidermike007]

First of all, Thai is a very poorly run airline, and a state owned one at that. One that gives away hundreds of millions of dollars worth of tickets a year to officials and higher ranked army goons. Second, they are never competitive on pricing, and they are not a great airline.

 

Third, we just do not know what this recovery is going to be like. I predict it is going to be long and slow. Worldwide. Nobody has ever dealt with the deliberate shutdown of an economy. It is so far beyond inane, if defies description. I can see some steps taken to limit the spread, like they did in South Korea, or like they are doing in Sweden. But a total lockdown is sheer stupidity, and will cripple millions upon millions of people. And the only ones supporting this, are the wealthy, or the ones with a cushy pension. For those of us who work for a living, and especially for those of us who are self employed, this is beyond the pale. Absolutely devastating, unjustified, unwise, and unwarranted. 

 

 

[anchadian]

 

 

 

Jonathan Head

 

@pakhead

·

10m

 

At a time when Thailand’s entire economy and budget are under massive strain, and ordinary people undergoing extraordinary hardship, why is it a priority to save an already failing airline that serves few Thais?

[SinCityGr8One]

21 hours ago, Wiggy said:

The loss of face would be too big IMHO. Rarely does a government allow a flag carrier to fail. But it would be a good time for a complete overhaul. 

JAL was Japan's Flag Carrier and they went belly up and reorganised. Remember that?

[spidermike007]

Let them fail. State monopolies are rarely the answer. Allow them to reorganize as a private carrier, with competent leadership, reasonable pricing and good service. And that private enterprise can enthusiastically say NO to the government and army  vamps. 

[Wiggy]

35 minutes ago, SinCityGr8One said:

JAL was Japan's Flag Carrier and they went belly up and reorganised. Remember that?

Yes, I remember it well. 

[BobbyL]

2 hours ago, anchadian said:

 

 

 

Jonathan Head

 

@pakhead

·

10m

 

At a time when Thailand’s entire economy and budget are under massive strain, and ordinary people undergoing extraordinary hardship, why is it a priority to save an already failing airline that serves few Thais?

Got to keep that Zurich and Munich route open no matter what. 

[LawrenceN]

20 hours ago, Assurancetourix said:

Thai will certainly be part of it unless it is really nationalized
But does that word exist in Thai?

จัดให้เป็นของรัฐบาล

You're welcome. Paste it into Google Translate if you need to know how to pronounce it.