Thai Airways May Cancel A380 Jet Order

[george]

Thai Airways may cancel A380 jet order

THAI reconsiders costly jumbo jet deal

KUALA LUMPUR: -- Thai Airways International (THAI) seems poised to cancel its order of six A380 superjumbo jets, which it considers not viable for its operations and, at a total cost of about US$1.8 billion, too expensive to fund.

Wallop Bhukkanasut, chairman of THAI's executive board, revealed the national carrier's revised stance on procuring the world's largest civil aircraft, which it agreed to purchase back in 2007 when the carrier [more...]

-- Bangkok Post 2009-06-09

[Steele404]

yea... and that "someone" has been flying Thai commercial planes as he/she pleases wasting it's fuel and operations... staying at ridiculously expensive international hotels... spending more than 2$ mil +++ pocket money on shopping sprees on him/herself a year on such trips.... if you know my drift about that "someone" i dare not to name...

Edited June 9, 2009 by Steele404

[marsteele]

I guess they are starting to realise that farangs no longer see thailand as a holiday destination.

[middlepath]

This is one way to get the price down. The take away...works both ways....

[grantbkk]

As poorly operated at Thai Airways International is this seems like a prudent business decision. Because it is Thai I am supicious that something else is going on, a back story of some kind. The move that makes most sense is to negotiate for smaller Airbus aircraft to reduce penalies for canceling A380 orders. However, "This is Thailand" and the minister of communications or health may want the country to start an airline manufacturing company, maybe call DumbassSiamAirlineManufacturingCompany, in an attempt to become the aircraft manufacturing hub of hubs.

Edited June 9, 2009 by grantbkk

[Carib]

Thai airways is not the only company suffering from the global money problems, and the related travel cutbacks. All mayor airlines are hurting bad. Contracts are being cancelled, aircraft are being stored, you name it, and it is happening.

[BigBikeBKK]

While Thai Air has been lambasted for poor management and massive corruption, this is a wise decision. Buying new planes in the middle of a global recession is not prudent. Anyway- I haven't flown TG in years as their prices just aren't competitive anymore...

[Ricardo]

Sad news, I'd always assumed that the reason for two daily 747-400 flights to LHR, was that eventually there would be just one daily A380, with cheaper-fares & competitive-quality again, and the same would be true for other core-routes to Europe/Aussie/USA.

But this is probably a sensible financial step, for a failing 2nd-rate airline, which seems to have lost its way strategically. One supposes that the government has made it clear, the cheque-book is not unlimited, at least until Thai Airways can demonstrate that they can organise a drinks-party in a brewing-establishment.

Also this may help Airbus catch-up on previously-delayed deliveries to the likes of Singapore, Qantas & Emirates or Qatar, who can put these beautiful aircraft to good use, like carrying people to Bangkok at-a-profit !

[wackysleet]

I guess they are starting to realise that farangs no longer see thailand as a holiday destination.

Not as THE only holiday destination, watch people start to travel to Vietnam soon and see the difference in attitudes.

[wackysleet]

Thai airways is not the only company suffering from the global money problems, and the related travel cutbacks. All mayor airlines are hurting bad. Contracts are being cancelled, aircraft are being stored, you name it, and it is happening.

Very true but how is it that a carrier as large as Virgin are making profits, is it because of the superior service they offer in relation to most other airlines?.

[spidermike007]

Well this is no wonder. Thailand has been doing everything possible lately, to sabotage it's tourism industry. If Thai Airways is

so serious about reviving it's business, would it not make sense to lower prices? I am always checking their prices, and they

are always much higher than either bangkok air, for domestic routes, and Eva Air for international routes. The one time I

tried them I did not think they were much better. And their surly attitudes did not help. What about the Thai visa policies?

When all of their neighbors are making visas easier for foreigners, one would think Thailand would follow the lead. Eliminating

visa fees accomplishes nothing. Anyone considering a trip here is not going to make that decision based on a tiny savings on

visa fees. How about lengthening the visa periods? How about making it far easier to re-new the visa? Policy of substance is

what we are looking for, and what the Thai government seems incapable of. What about eliminating this heinous ATM fee?

Thailand should be subsidizing ATM withdrawals, not taking them. With 30% hotel occupancy nationwide, one would expect some

constructive policy. Do we see any? Do we see any cooperation between the immigration office, the tourism dept, and the central

govermnent? Is this too much to ask? Why is this country so fabulously dysfunctional?

[BigBikeBKK]

However, "This is Thailand" and the minister of communications or health may want the country to start an airline manufacturing company, maybe call DumbassSiamAirlineManufacturingCompany, in an attempt to become the aircraft manufacturing hub of hubs.

555! Spot on!

[wackysleet]

While Thai Air has been lambasted for poor management and massive corruption, this is a wise decision. Buying new planes in the middle of a global recession is not prudent. Anyway- I haven't flown TG in years as their prices just aren't competitive anymore...

Surely as your post states, until they sort out their internal problems they will never compete in a shrinking market scenario, it's a case of "survival of the fittest."

[edwinchester]

I have never flown Thai but wifey has, most recently last month back to BKK from LHR.

Her opinion was that the plane was very old and dirty with no seatback IFE. Cabin crew were 'very old' and disinterested.

It was very poor compared with the outgoing flight with Etihad for which she had nothing but praise.

If Thai are no unable to ungrade their deteriorating long haul fleet I can only see them losing even more of what should be their core customers.

[Ricardo]

maybe call DumbassSiamAirlineManufacturingCompany, in an attempt to become the aircraft manufacturing hub of hubs.

Or start with just the aircraft wheels, so we really are manufacturing hubs here ?

Very true but how is it that a carrier as large as Virgin are making profits, is it because of the superior service they offer in relation to most other airlines?.

Part-owned/managed by Singapore Airlines ... now if only we could persuade them to accept TG, perhaps as a gift ?

[stuffonsticks]

Yes I cant agree more on that one! Just been to Singapore for a break and visa. Stamp! there you go Sir 3 months without asking have a nice stay in our country and spend lots of money! Easy

[wrecker]

Thai airways is just another example of a badly led company. I assume that is what you get when military are involved in the day to day operations of companies. Incapable people are leading public companies, stockholders have no say as the government appoint their henchmen in toppositions. PTT, Thai, MCOT just give it a name.

If a 380 is too expensive and not viable why was it purchased under the military led junta? What will the fine be? Well never mind, Thai airways will simply double the costs for its domestic flights, after all they are up to three times expensive on certain routes as Air Asia. They imposed surcharges for higher oil when the oil price dropped to near all time lows half a year ago they removed the surcharge and made the price of the ticket simply higher so we are all paying the same or even more.

I avoid going with Thai. A company with a airforce hi raki as president cannot guarantee my safety, airplanes from the airforce are falling out of the sky like ripe coconuts, year after year after year.

[KhunDave]

I guess they are starting to realise that farangs no longer see thailand as a holiday destination.

Not as THE only holiday destination, watch people start to travel to Vietnam soon and see the difference in attitudes.

For years now I've been using Air France for Europe-BKK flights. On the approach to BKK the cabin crew put little "Final" markers on the seats of those passengers who are continuing to Vietnam. Out of idle curiousity I've been monitoring this. Until fairly recently, the number of Final markers on any given flight tended to be minimal. This year however I have noticed a marked increase - when I last arrived at Suvarnabhumi in April I would estimate the number of passengers continuing to Vietnam to have been more than 50%. Not a scientific analysis by any means, but one gets the feeling that the balance is shifting in Vietnam's favour.

[thaibkk]

why not sell all planes of thai airways and renamed it thai railways... much cheaper transport

[thaimate]

We gave up flying Thai airways years ago ,poor planes,poor service and to expensive ,now use Eva or Emirates,good srvice modern seat back tv ect.

[mattcodes]

Thai airways is not the only company suffering from the global money problems, and the related travel cutbacks. All mayor airlines are hurting bad. Contracts are being cancelled, aircraft are being stored, you name it, and it is happening.

Very true but how is it that a carrier as large as Virgin are making profits, is it because of the superior service they offer in relation to most other airlines?.

Virgin successfully hedged (I promise to pay X per barrell in month A, B, C) their fuel prices before the price of oil reach historical highs so this period did not impact them as much as the other airlines. However the extent of their hedging could be detrimental for next set results. They also nicely benefited from BA's <deleted> up at T5, so Virgin managed to grab a good share of BA's premium traffic, nicely time due to Virgin investments in better premium cabins in the previous years.

Also consider that Virgin operate only a small set of route, they are leaner than a national airline which carries an expectation to be full route service.

Admittedly though a reputation and consistency of service will carry some weight, and if they aim to the same standards of Singapore Airlines then this is promising, but remember though most airlines will need a load of 80% plus to be profitable including 5 star airlines such as Singapore Airlines (all three sectors were <50% full last time as an indication) so expect some rough results ahead,

Edited June 9, 2009 by mattcodes

[JoeThePoster]

Thai Airways may cancel A380 jet order

THAI reconsiders costly jumbo jet deal

Not going to happen unless the contract is switched to other stock of equivalent value. Airbus possibly have bent over backwards to get that initial deal signed.

[Minsamui]

Thai airways is not the only company suffering from the global money problems, and the related travel cutbacks. All mayor airlines are hurting bad. Contracts are being cancelled, aircraft are being stored, you name it, and it is happening.

Very true but how is it that a carrier as large as Virgin are making profits, is it because of the superior service they offer in relation to most other airlines?.

Virgins profits were due to clever fuel hedging but all that is finished now. its the next set of figures that will define whether Virgin is 'a cut' above. Somehow i doubt it.

[jackdanielsesq]

The entire A380 jet concept was flawed from the begin. The amazing part is that they realized their folly so early. The Hummer of all planes, indeed.

BR>Jack

[robblok]

Wonder if the bribes the got from Airbus also have to be paid back. (im sure they have had bribes)

[wackysleet]

Virgin successfully hedged (I promise to pay X per barrell in month A, B, C) their fuel prices before the price of oil reach historical highs so this period did not impact them as much as the other airlines. However the extent of their hedging could be detrimental for next set results. They also nicely benefited from BA's &lt;deleted&gt; up at T5, so Virgin managed to grab a good share of BA's premium traffic, nicely time due to Virgin investments in better premium cabins in the previous years.

Virgin is partly owned and managed by Singapore Airlines, and most if not all airlines have financial experts telling them when to forward buy, thats obvious, but service goes a very long way towards the amount of passengers carried, read the posts and see how many posters have a good word to say about Thai Airways, most people do not fly premium although the increased cost of such does help airlines, most of the revenue is generated in economy, please note I did not say profit.

[pukkagent]

Sadly we see a lot of Thailand shooting themselves in the foot lately. They will learn their lessons at their most desperate moment, and in the mean time, the people living here will have to tread carefully, as desperate Thai's and immigrants will commit higher amounts of crimes against farangs, because there simply isn't any money for them.

Well this is no wonder. Thailand has been doing everything possible lately, to sabotage it's tourism industry. If Thai Airways is

so serious about reviving it's business, would it not make sense to lower prices? I am always checking their prices, and they

are always much higher than either bangkok air, for domestic routes, and Eva Air for international routes. The one time I

tried them I did not think they were much better. And their surly attitudes did not help. What about the Thai visa policies?

When all of their neighbors are making visas easier for foreigners, one would think Thailand would follow the lead. Eliminating

visa fees accomplishes nothing. Anyone considering a trip here is not going to make that decision based on a tiny savings on

visa fees. How about lengthening the visa periods? How about making it far easier to re-new the visa? Policy of substance is

what we are looking for, and what the Thai government seems incapable of. What about eliminating this heinous ATM fee?

Thailand should be subsidizing ATM withdrawals, not taking them. With 30% hotel occupancy nationwide, one would expect some

constructive policy. Do we see any? Do we see any cooperation between the immigration office, the tourism dept, and the central

govermnent? Is this too much to ask? Why is this country so fabulously dysfunctional?

[geriatrickid]

Considering that the airline industry on whole is on track for a reported record $9billion US loss this year, at face value it makes sense. However, an interesting article popped up in the past week about UA, that tired and crusty legacy airline and star alliance partner of TG. UA knows its fleet is getting long in the tooth. It's now in the process of looking at a major fleet investment because now is the time to buy, when both Boeing and Airbus are doing everything possible to get fleet orders. It will be cheaper to order now when prices are "low" than once the economy recovers in a year or two.

If TG follows through with the cancellation this suggests to me that;

1. TG is willing to pay the penalty because it just can't raise the funds to finance the aircraft, which in turn suggests that no one wants to lease the aircraft to TG at a price it can afford or that it cannot get credit.

2. It's a bargaining ploy which will end in disaster for TG since Airbus might be desperate to sell, but they weren't born yesterday and TG's buyers are no match for the savvy Airbus team.

3. TG management has no vision or ability to undertake longterm planning. It's no secret the TG fleet is tired and worn. A failure to prepare for fleet upgrades now, means that in 2 years when people are traveling again, TG will become the USAirways/Alitalia/Olympic Airways of Asia and be avoided like the plague.

In respect to Thailand soliciting a manufacturing facility, it's too late. China is opening its Airbus facility. Thailand missed the boat once again.

[wackysleet]

The entire A380 jet concept was flawed from the begin. The amazing part is that they realized their folly so early. The Hummer of all planes, indeed.

BR>Jack

People said similar things when Boing launched the Jumbo.

[Killroy]

True that Thai have slipped down the scale to be a B-player with the old and dodgy planes..

I still fly with then only for one reason,it have direct flight to Bkk from where we live.

And with small children that's a big benefit,other then that I'll stay away from Thai...

I hope they can shape up,it was a good airline some 10 years back...