Thai Airways To Lease 15 New Aircraft Valued At 35.5bn Baht

[george]

THAI spends Bt35.5 bn on new aircraft

BANGKOK: -- Thai Airways International's plan to acquire 15 new aircraft by 2014 for Bt35.5 billion was approved by its board yesterday, in recognition of stricter emissions requirements in the near future.

Seven 300-seat aircraft will be acquired through a Bt31.3 billion financial lease for regional routes, while eight 350-seat aircraft for long-haul routes will be acquired via operating leases running 10-15 years, chairman Ampon Kittiampon said.

A budget of Bt922 million was also set aside for two engines for the regional aircraft, and another one of Bt3.3 billion for three engines for international routes.

These 15 aircraft will join five A330-300 aircraft that have already been ordered and will be put in service this year and six A380 aircraft that will enter the fleet from 2012-2013.

President Piyasvasti Amranand said the new aircraft's influence would not show up in this year's performance but would be significant in the long term.

The procurement would be as transparent as possible, to keep intervention at bay, he said.

"Our focus will be on further reducing non-fuel expenses by Bt12 billion this year (from Bt10.8 billion last year), and how to make the airline profitable in 2010 as scheduled," he said.

These energy-efficient aircraft will help the flag carrier meet the European Union's stricter greenhouse gas emission restrictions, he said.

In 2012, airlines flying into the EU will face emissions quotas in the EU's attempt to fight climate change.

THAI now operates 91 planes - 47 Boeings, 42 Airbus' and two ATRs - with a reported average age of 11.6 years, versus six years for a regional leader like Singapore Airlines.

The THAI board also approved a hedging policy to reduce the risk from fluctuating jet fuel prices.

"This policy is devised for the company's operating results to meet target and to prevent risks to shareholders and stakeholders. It is not intended to generate revenue or profit," Ampon said.

Fuel risk management would be carried out continuously and systematically by the Petroleum and Corporate Insurance Department for 20-80 per cent of the average fuel consumption per month taken in a fiscal year.

Last year, only 3-20 per cent of its fuel needs was hedged. In 2008, the airline lost Bt6 billion through hedging, as contracts were bought when oil prices peaked.

The board also appointed Pravich Rattanapira, the science minister in the Surayud government, to immediately fill the executive chairman post vacated by Wallop Bhukkanasut.

-- The Nation 2010-02-09

[newsfooter][/newsfooter]

[geriatrickid]

Nice spin.

Read the story again:

in recognition of stricter emissions requirements in the near future.

TG would have some issues trying to fly into Australia, the EU & the USA unless it complied with some very basic emission standards. If it wasn't for those evil meddlesome do gooder farangs, TG would have been able to use its obsolete technlogy, no problem.

[bangon04]

"The board also appointed Pravich Rattanapira, the science minister in the Surayud government, to immediately fill the executive chairman post vacated by Wallop Bhukkanasut. "

...in its never-ending quest for transparency and management expertise at the leadership level.....

[george]

Update:

Thai Airways Announces Massive Expansion Plan

The Thai Airways board of directors met on Monday morning to discuss the airlines expansion over the next 15 years. A decision was reached to purchase 15 new aircraft over the next 4 years, expanding the fleet to over 100 planes.

Thai Airways Chairman Amphon Kittiphong revealed that the airline had agreed on plans to acquire or lease 15 new aircraft between 2010-2014. A budget of 35 billion baht has been allocated for the expansion.

The latest approval followed the previous acquisition of 5 Airbus 330-300’s which will begin operation mid-2010 and the 6 Airbus A-380’s that are on order and will be in operation between 2012-2013.

At the board meeting, it was agreed that with a view to the future, Thai airways would look to acquire seven 300-seat aircraft to be used for regional flight routes and approximately 8 long-haul 350+ seat aircraft to be rented for a period of 10-15 years.

Thai Airlines expansion plans indicated the requirement to have up to 102 aircraft in operation over the next 15 years with 70% of that fleet to be used for less than 10 years. At present Thai airways operates 88 different aircraft, most of which are used for between 11-12 years.

Maintenance and spare-parts budgets were also outlined in Monday’s board meeting with the airline allocating some 922 million baht towards regional route aircraft and 3 billion baht towards their long-haul operations.

-- PDN 2010-02-09

[infernalman7]

Wonder how old the United's fleets are.

[OZEMADE]

I wont fly Thai, there more expensive than Qantas.

[jfchandler]

I thought they were desperately trying to get out of their commitment to buy the bunch of A-380s some months back...saying they no longer fit with the airline's needs or financial posture... Now they do???

They can buy (lease) new aircraft... Though plans are always just plans, especially regarding Thai Air... Let's see what actually comes to pass in real terms in the coming years...

However, excessively high prices and exceptionally mediocre service aren't going to win them many new customers...no matter how many planes they buy/lease.

[george]

Related article:

EXCLUSIVE INTERVIEW

Flying out of turbulence

The man at the helm of troubled THAI tells Suthichai Yoon how he can turn the airline around:

http://www.thaivisa.com/forum/Flying-Thai-...ce-t337097.html

[bkkjames]

I thought they were desperately trying to get out of their commitment to buy the bunch of A-380s some months back...saying they no longer fit with the airline's needs or financial posture... Now they do???

They can buy (lease) new aircraft... Though plans are always just plans, especially regarding Thai Air... Let's see what actually comes to pass in real terms in the coming years...

However, excessively high prices and exceptionally mediocre service aren't going to win them many new customers...no matter how many planes they buy/lease.

The nice thing about leasing over purchasing is it's short term affect on the balance sheet which appears to be the mindset of the current (previous, previous before that) board. Always been the airlines biggest weakness - short term thinking, the fleet is a perfect example of this.

[eirikur3]

I think it is s very good move, the Thai Airways fleet needs to be renewed. My single experience flying CPH-BKK was very positive. I dont think there is any need to focus on alterenate motives, many people change they old appliances out in favour of new ones, and perhaps safer ones

[laocowboy2]

I thought they were desperately trying to get out of their commitment to buy the bunch of A-380s some months back...saying they no longer fit with the airline's needs or financial posture... Now they do???

They can buy (lease) new aircraft... Though plans are always just plans, especially regarding Thai Air... Let's see what actually comes to pass in real terms in the coming years...

However, excessively high prices and exceptionally mediocre service aren't going to win them many new customers...no matter how many planes they buy/lease.

I agree that the product is "broken" at present. Example from last year. Paid for business class to BKK, checked in on-line and had seat assigned. Arrived at airport to find that a smaller plane had turned up and that I had been bumped into economy. Too bad but it happens. What made me really mad was to discover that FOUR business class seats were blocked off for crew to rest during the flight - a flight of only four hours! And yes, it took me months of argument to get a refund of the difference.

Now I have that off my chest, TG does badly need new aircraft. Two major reasons. The most important is fuel efficiency - old planes are much more thirsty and I see oil nearer $100 than $50 by year end - and possibly higher if economic recovery does keep going in India and China. The second is to make it cost effective to have a proper entertainment system. Like it or not, airlines like Emirates have raised the bar in this area. There are also efficiencies in having a more rational fleet composition (designed to fit routes/load factors) in terms of servicing, spares and pilots (many pilots are qualified for only certain aircraft - and require to be taken offline for retraining if they are to fly another type).

[crocodilexp]

"Bt3.3 billion for three engines for international routes."

There are no 3-engined modern aircraft that I know of. Maybe MD-11, but that was a flop at launch and no longer in production. DC-10? Lockheed Tristar? B727?

[paulnuek]

Thai is simply too expensive!!!!!!!

I travel from Newcastle - Bangkok via Amsterdam usually with China Airlines for around £600-620 in December time.

Thai is over £800 (unless I go from London, which ends up costing more anyway!!!)

Thai should maybe go down the budget airlines route.

Cheaper flights - planes are full!!!!

[bkkjames]

"Bt3.3 billion for three engines for international routes."

There are no 3-engined modern aircraft that I know of. Maybe MD-11, but that was a flop at launch and no longer in production. DC-10? Lockheed Tristar? B727?

Loved the L1011 - bring it back I say! sorry off topic.

[tigerbeer]

Air Asia would show THAI on how to do business.

Their expansion plan should include: NO MORE FREE UPGRADES for politicians and executives!

and NO MORE FREE TICKETS!

sometime during this decade, they can then make some profits.

[exexpat]

There is an airline in the US called Allegiant which exclusively flies fuel thirsty DC-10 series planes. They undercut Southwest and Jetblue by a signifcant margin, but also avoid them by not going to the major airports they serve.

I don't believe that fuel is really that much of an issue as the plane itself.

Of course, the difference is a full service airline and a rock bottom discount airline.

However, if Thai continues to be clobbered by discount airlines and fierce competitors, then it may go the way of JAL

Edited February 9, 2010 by exexpat

[notime]

"Bt3.3 billion for three engines for international routes."

There are no 3-engined modern aircraft that I know of. Maybe MD-11, but that was a flop at launch and no longer in production. DC-10? Lockheed Tristar? B727?

They must be talking od SPARE engines "crocodilexp". I guess the airlines need them standing by in case of a plane developing engine problem or dropping one off on the way and still landing. At last I know how much they are: 1.1 billion THB each. With all my savings I'm nowhere near to buy myself even an engine cover ;-(

[brianb1944]

Air Asia would show THAI on how to do business.

Their expansion plan should include: NO MORE FREE UPGRADES for politicians and executives!

and NO MORE FREE TICKETS!

sometime during this decade, they can then make some profits.

I agree, when Air Asia say "no frills" they mean it, but they are very inexpensive, we fly them several times a year, and hope each time we dont have any problems, cos if you do, their is no redress.

[flyfrog]

I wont fly Thai, there more expensive than Qantas.

I agree, how much more they gonna ask for a ticket then?

Maybe they can buy some more planes with the frozen money from Taksin?

[mrdome]

THAI needs to urgently upgrade its business class product. Overall, cleaner and more efficient aircraft is always good news.

[think_too_mut]

I thought they were desperately trying to get out of their commitment to buy the bunch of A-380s some months back...saying they no longer fit with the airline's needs or financial posture... Now they do???

It was discussed here before.

They can't get out of that contract. 1.8 bil US$ for 6 aircrafts would turn into 700 mil US$ penalty if they walked away, so they decided to go along.

[backsoon]

"Bt3.3 billion for three engines for international routes."

There are no 3-engined modern aircraft that I know of. Maybe MD-11, but that was a flop at launch and no longer in production. DC-10? Lockheed Tristar? B727?

They must be talking od SPARE engines "crocodilexp". I guess the airlines need them standing by in case of a plane developing engine problem or dropping one off on the way and still landing. At last I know how much they are: 1.1 billion THB each. With all my savings I'm nowhere near to buy myself even an engine cover ;-(

LOOK AT THIS WHOLE BUSINESS FROM A SLIGHTLY DIFFERENT PERSPECTIVE.

You are running a business with a BIG loss, year in, year out. Solution?! Give them another credit of 35Bn to prove that the losses were not accidental!

Second best to owning a bank must be owning a flag carrier! REALLY, as they say,- help them to help themselves! Or was it UNESCO money?

[backsoon]

"Bt3.3 billion for three engines for international routes."

There are no 3-engined modern aircraft that I know of. Maybe MD-11, but that was a flop at launch and no longer in production. DC-10? Lockheed Tristar? B727?

They must be talking od SPARE engines "crocodilexp". I guess the airlines need them standing by in case of a plane developing engine problem or dropping one off on the way and still landing. At last I know how much they are: 1.1 billion THB each. With all my savings I'm nowhere near to buy myself even an engine cover ;-(

LOOK AT THIS WHOLE BUSINESS FROM A SLIGHTLY DIFFERENT PERSPECTIVE.

You are running a business with a BIG loss, year in, year out. Solution?! Give them another credit of 35Bn to prove that the losses were not accidental!

Second best to owning a bank must be owning a flag carrier! REALLY, as they say,- help them to help themselves! Or was it UNESCO money?

And do not expect TG to drop the prices... Now they have a perfect excuse,- it's the bloody Yanks, Aussies and Europeans, forcing us to fart less...

[laocowboy2]

I thought they were desperately trying to get out of their commitment to buy the bunch of A-380s some months back...saying they no longer fit with the airline's needs or financial posture... Now they do???

They can buy (lease) new aircraft... Though plans are always just plans, especially regarding Thai Air... Let's see what actually comes to pass in real terms in the coming years...

However, excessively high prices and exceptionally mediocre service aren't going to win them many new customers...no matter how many planes they buy/lease.

I agree that the product is "broken" at present. Example from last year. Paid for business class to BKK, checked in on-line and had seat assigned. Arrived at airport to find that a smaller plane had turned up and that I had been bumped into economy. Too bad but it happens. What made me really mad was to discover that FOUR business class seats were blocked off for crew to rest during the flight - a flight of only four hours! And yes, it took me months of argument to get a refund of the difference.

Now I have that off my chest, TG does badly need new aircraft. Two major reasons. The most important is fuel efficiency - old planes are much more thirsty and I see oil nearer $100 than $50 by year end - and possibly higher if economic recovery does keep going in India and China. The second is to make it cost effective to have a proper entertainment system. Like it or not, airlines like Emirates have raised the bar in this area. There are also efficiencies in having a more rational fleet composition (designed to fit routes/load factors) in terms of servicing, spares and pilots (many pilots are qualified for only certain aircraft - and require to be taken offline for retraining if they are to fly another type).

In all my years of travelling I have never heard of this. I don't for one minute doubt it happened, but it is bordering on being unbelievable...!

Where were you flying from, why were you singled out for a downgrade and what compensation were you offered? There but for the grace of God go I, if that is even a remote possibility I want to be ready for it!!!!

Also when was it?

Back on topic I have to say that it seems to be mostly good news coming out of Thai at the moment, it looks like the penny has finally dropped and they're getting their shop in order, the change at the top seems to be doing some good.

TG 316 on 20/12/08 from Delhi to BKK. I received a cheque for the fare differential on 19/2/09 afer repeated letters and calls. No other compensation. Why me? Unknown, especially as I had checked in online and had a seat assigned. I suspect some money changed hands from a passenger who checked in at the desk. I now tend to fly CX on the same route to avoid TG. TG also need to improve their ground handling (poor check-in staff outside Thailand, poor (compared to EK for example) business lounge product at BKK airport - as an example not even Chateau Plonk in TG while you have good wine and champagne in EK plus food choices galore - including sushi).

[meelousee]

Nice spin.

Read the story again:

in recognition of stricter emissions requirements in the near future.

TG would have some issues trying to fly into Australia, the EU & the USA unless it complied with some very basic emission standards. If it wasn't for those evil meddlesome do gooder farangs, TG would have been able to use its obsolete technlogy, no problem.

Yea nice spin Although emissions are a concern, refits with new engines and hush kits will be standard.

But the Real Issue is that TGI does not have any money not for the above or the below I doubt the union will loan to the boards wishes again since they got let down last time around.

New Dry leases require pilots but I dont think they have any new pilots. Training and certs cost to much last year and more this year and it is longer than just 1 year to get them up to par.

With Thai international it has always been the same a major issue over how much money they have to invest.

But any way as you say Nice Spin

Edited February 9, 2010 by meelousee

[laocowboy2]

Nice spin.

Read the story again:

in recognition of stricter emissions requirements in the near future.

TG would have some issues trying to fly into Australia, the EU & the USA unless it complied with some very basic emission standards. If it wasn't for those evil meddlesome do gooder farangs, TG would have been able to use its obsolete technlogy, no problem.

Yea nice spin Although emissions are a concern, refits with new engines and hush kits will be standard.

But the Real Issue is that TGI does not have any money not for the above or the below I doubt the union will loan to the boards wishes again since they got let down last time around.

New Dry leases require pilots but I dont think they have any new pilots. Training and certs cost to much last year and more this year and it is longer than just 1 year to get them up to par.

With Thai international it has always been the same a major issue over how much money they have to invest.

But any way as you say Nice Spin

Pilot availability not so much of a problem as they can hire in fully qualified falang staff on a contract basis (as has been done here in India). As the Thai pilots finish their re-training, the foreign staff can be dispensed with. Cost is another matter.

[mythBuster]

Thai would become a real airline which is able to make real profit when they succeed in throwing out the government (army) appointed chairman and top. When it succeeds to block any government official and any person higher up for flying free (or should we say on the expense of the general shareholders?) It would succeed when it actively pursues the cases against PAD for screwing up their business.

Anything else is nonsense. Thai airways is a company just like other former state owned companies. Highly inefficient, highly overrated, too much political influence and with unions that are not unions but pressure groups from the happy few. The books of Thai are most probably cooked, they just cancelled and postponed the delivery of a number of aircraft and now a new chairman comes in they start spending again.

It is like in the police force, when they get a new chief they start cracking down for a few months after which they gon into a winter sleep.

[asiawatcher]

I wont fly Thai, there more expensive than Qantas.

Ditto the food quality and service is all but gone these days. Seats in aircraft in general have no leg room for anyone taller than a Thai and the only ones with any modicum of service seem to be the check in counters at the airport. Seems also the deafness of Thai crew has entered the foray with the announcements now so loud as to cause pain.... will they ever learn?

[laocowboy2]

Thai would become a real airline which is able to make real profit when they succeed in throwing out the government (army) appointed chairman and top. When it succeeds to block any government official and any person higher up for flying free (or should we say on the expense of the general shareholders?) It would succeed when it actively pursues the cases against PAD for screwing up their business.

Anything else is nonsense. Thai airways is a company just like other former state owned companies. Highly inefficient, highly overrated, too much political influence and with unions that are not unions but pressure groups from the happy few. The books of Thai are most probably cooked, they just cancelled and postponed the delivery of a number of aircraft and now a new chairman comes in they start spending again.

It is like in the police force, when they get a new chief they start cracking down for a few months after which they gon into a winter sleep.

Agree wholehertedly. The abuse of staff tickets (for VERY extended families), auto upgrades for politicians and company management (and God only knows who else) and nepotism in appointments have to stop at once. I have always been in jobs that required a lot of flying (at both ends of the plane) and a good quality gauge is the total number of airline staff divided by the number of aircraft. Somehow the really crappy airlines (Kuwait Airways, Olympic etc) always seem to have the highest ratios while Singapore Airlines for example has a much lower ratio. Funny that! Unless and until TG is run as a business rather than a RTAF sinecure factory, positive change will be difficult. While I think the new top team have the right intentions and make the right noises, I fear that they will keep being blocked by unions plus RTAF plus "men from the ministry" that can delay any expenditure indefinitely. And then the good guys will give up and go to work for a real company, and the decline will continue.

If the Thai tourism sector was dependent on TG ..... Oh dear!

[lifeincnx]

Regardless of new planes, Thai is still not competitive. I fly EVA deluxe economy trough Taiwan to Los Angeles and get the latest jets, a wider seat with more leg room and a good sleep position recline for less than Thai's economy steerage class.