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

[rheinwiese]

Don't know how they do the math.

15 Airbus A330-300 and 200 aircrafts = 35.5 Billion Baht = 1.1 Billion USD = 73 Million USD a piece

Current list price of the 330 series is approx. 162 Million USD a piece.

Even considering a possible 30% discount on the list price, there is a huge gap.

For 73 Million USD they might get 737's, but certainly no 300-350 seater widebody.

[Jonathanpattaya]

If any of this and, I emphasise, any of this is to be believed then THAI will follow JAL.

I will watch with interest but have my doubts.

THAI just don't make the cut!

Edited February 9, 2010 by Jonathanpattaya

[laocowboy2]

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.

Example of actual fares quoted to me today for my end March trip (en route to HKG for rugby)

Sorry about font size - tried but failed to reduce. However point here is that worst of three has highest fare while the best (of a not so great lot on this route) has the lowest.

Thai Airways

Delhi - Bangkok =TG 316 J 24MAR 3 DELBKK DK1 0005 0535

Bnagkok - Delhi =TG 315 J 05APR 1 BKKDEL DK1 1950 2245

Fare = 44200 /- (Business Class)

Cathay Pacific

Delhi - Bangkok =CX 708 I 24MAR 3 DELBKK DK1 0400 0930

Bangkok - Delhi =CX 751 I 05APR 1 BKKDEL DK1 1725 1955

Fare = 35700 /- (Business Class)

Jet Airways

Delhi - Bangkok =9W 064 P 24MAR 3 DELBKK DK1 0100 0655

Bangkok - Delhi =9W 063 P 05APR 1 BKKDEL DK1 1825 2130

Fare = 38050 /- (Business Class)

[bkkjames]

Don't know how they do the math.

15 Airbus A330-300 and 200 aircrafts = 35.5 Billion Baht = 1.1 Billion USD = 73 Million USD a piece

Current list price of the 330 series is approx. 162 Million USD a piece.

Even considering a possible 30% discount on the list price, there is a huge gap.

For 73 Million USD they might get 737's, but certainly no 300-350 seater widebody.

Accuracy in the numbers is only relevant if they were buying the planes, when leasing them it sounds better to quote full retail price (if they had bought them) to make it appear to be a good deal.

[Stjohnm]

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!!!!

You just have to travel at the right time of year Christmas is the peak, I did my annual trip home to see the folks & the end of last summer get a new passport & Visa etc, flew TG on one of their "special Deals, cost only 25,000 Baht Return, but it was a use it or lose it ticket & I couldn't stay longer than a fortnight. BA do similar deals in the low season & if you don't mind a few hours in the middle east the likes of Emirates & Qatar Airways are dirt cheap starting at 16,000 Baht.

[thaiozy]

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).

Well i can sought of understand that as when i fly from auss i like to book the back seat near the galley (for obvious reasons ), only to find that they have put up reserved signs & am offered another seat

[webfact]

Thai Airways plans to lease 15 new aircraft

BANGKOK: -- (AFP) - Thai Airways has announced plans to spend more than one billion dollars leasing 15 new aircraft over the next four years as the airline seeks to brighten prospects following two years of financial woes.

The flag carrier's board of directors agreed the budget on Monday as it appointed Pravich Rattanapira as new chairman of its executive board following the resignation of his predecessor last month in an excess baggage scandal.

"The Board of Directors approved of the Aircraft Acquisition Plan for Years 2010-2014 with the budget of 35,484 million baht (1.07 billion dollars)," the airline said in a statement.

The airline plans to lease seven 300-seater aircraft for its regional routes and eight 350-seater aircraft for ten to 15 years on its intercontinental routes.

Thai Airways currently has a fleet of 91 aircraft, comprising 47 Boeing, 42 Airbus and two ATR.

The company has been in financial straits since posting a loss of 21.3 billion baht in 2008 as a result of the global financial crisis and political protests that closed Bangkok's airports in November-December 2008.

Thai Airways has since launched a civil lawsuit against the protest leaders.

The company delayed delivery of six Airbus A380s, now due to arrive 2012-2013, because of a shortage of cash, and a further five A330-300 aircraft will finally become operational this year.

Freeloading scandals have also beset the airline, with company president Piyasvasti Amranand last year vowing to stop some current and former executives of the airline claiming free first-class seats as a matter of course.

Former executive chairman Wallop Bhukkanasut quit the airline in January after being accused of exploiting his position by transporting 30 pieces of luggage weighing 398 kilos (876 pounds) from Japan to Bangkok in November.

Thai Airways is continuing to negotiate with the government for a financial bail-out package.

Last year the company said it needed to borrow 37 billion baht (1.1 billion dollars) in local and international loans to turn its fortunes around.

tp-ct/dwa

-- © AFP 2010-02-09

[newsfooter][/newsfooter]

[laocowboy2]

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!!!!

You just have to travel at the right time of year Christmas is the peak, I did my annual trip home to see the folks & the end of last summer get a new passport & Visa etc, flew TG on one of their "special Deals, cost only 25,000 Baht Return, but it was a use it or lose it ticket & I couldn't stay longer than a fortnight. BA do similar deals in the low season & if you don't mind a few hours in the middle east the likes of Emirates & Qatar Airways are dirt cheap starting at 16,000 Baht.

Have not flown Qatar (although reports are good) but EK is fine and Dubai airport is a pleasant place to spend a few hours (although large number of flights generally mean short transfer timings). Etihad is good as well although Abu Dhabi airport is not as comfortable as Dubai. Idea - if you are one of the nationalities with visa waiver in Dubai, why not think about passing through Immigration and going out for a meal or for some shopping? I often see friends at a nearby bar (or three) when passing through.

[alant]

I wont fly Thai, there more expensive than Qantas.

not the flight i have looked. must admit i go to england though

[BlueSmurf]

Too little too late!

[MaiChai]

How is this MASSIVE? Its just doing some forward planning to buy jets it needs to replace jets that won't meet emissions standards abroad or that it will need to retired due to old age. Assuming Thai does not want to become a 3rd world airline flying unsafe and inefficient jets, which it will do if it does not keep its fleet up to date?

[geriatrickid]

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.

You raised an good point. EVA is slowly expanding. It will introduce flights to eastern Canada via Toronto at the end of March. The result? TG will lose a large part of that market since its star alliance partner AC will not be able to compete using the current LAX feeder strategy. Even on star alliance, the code shares with ANA or UA using the NRT transfer hub are less costly and more reliable than the reduced TG schedule to LAX. TG basically abandoned the North American market when it cut its schedule. EVA has adopted a slow but steady strategy, building a solid schedule using LAX/SFO/SEA and YVR. Then it built a NE USA hub using EWR and now Canada. Of all the competitors to TG, it is EVA that needs to be feared the most. The Deluxe Economy and Premium Laurel service beats TG hands down and these are the customers TG needs if it is to make a profit on the North American routes.

The charter services from Europe via Thomas Cook have made a dent in TG's "package" rate business. It looks bleak for TG.

[rakman]

"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 are spares, in case of engine failures.

[Johpa]

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

What TG needs to upgrade is their management class and replace it with professional business personnel as opposed to a social club engaged in crony capitalism. But you have to give them credit on the advertising front as they somehow continue to convince people to fly the over-priced skies of Thai.

[infernalman7]

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.

Weird. I have never heard of something like this before. I know about the reserved seat for staff but I don't think they would kick a BC cust to economy for any kind of reason.

Edited February 9, 2010 by infernalman7

[OZEMADE]

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.

And where are they going to get all this money from. "O" I forgot they are going to seize all of Thaksins assets.

Edited February 9, 2010 by OZEMADE

[marc651]

This new "investment" might be the nail in the coffin of Thai Airways. This naive move can only drag the company further -and faster- down! In times of crisis, this company which was already in serious trouble because of significant mismanagement, now investing big time - where other carriers are cutting costs...

In order to survive they should be doing the opposite: restructuring, get organised and install a knowledgeable management team, and most of all become smaller and more efficient.

It looks like their recent record losses were just the appetizer. Now they're cooking the main dish.

[astral]

I have to agree with the notion that the aircraft are only part of the picture for an airline...........

[v2drinkers]

I will never fly thai airways again. Of the two times I have used them both flights have been nightmares.

My first time the seat back infront of me was broken and reclined too far meaning I could not eat the meal that was given to me as the table was only about 20 degrees away from the seat back. The staff would not get the person in front to put the seat up as they were not prepared to wake him meaning that as I could not eat my meal I had to give it to them back I also could not even get out of my seat due to this to go to the toilet. When I finally pushed his seat up with my feet the passenger complained and I had the chief steward come up to me to warn me to stop this. I politely told him to get the seat sorted and I would not do it I also asked if I could finally have my meal due to not being able to eat it previously only to be told that the meals had been served and I could not have it now. Eventually they decided to upgrade the gentleman in front of me to first class and didnt even apologise to me.

The second time I phoned them on the day to check my flight was leaving OK on the day only to turn up at heathrow to be told their was a fault with the flight and we would be put up in a hotel overnight and they would put on an extra flight the next day. No problem you might think these things happen - I agree. However It transpired that the fault was with the plane the night before and they had put the people from the previous night on our flight and rearranged ours to the next day - I would also have no problems with this provided the airline was honest with me (after all I could have spent an extra night in the comfort of my home had they informed me when I called). When we turned up at the airport the next day for our flight the Thai service desk knew nothing about a new flight being put on and didnt know what to do with us. When we eventually got checked in we then found our 3pm flight was delayed yet again with nothing showing on the departures board (not even saying delayed - just saying gates open at 2 when it was 3 already) and the thai service counter airside had no Thai airways staff on it but a nice scandanavian airlines gentleman helped us and eventually (about 5.30) we finally found out what gate the plane was meant to go on and we had to go there and bang on the gates doors to get some information from the Thai Airlines staff.

Couple that with lousy entertainment systems on their planes and I consider Thai airways to be one of the worst Airlines I have ever been with.

Customer service from Thai Airways is totally crap and I am prepared to pay a lot more to go by EVA air than them anyday and will go indirect rather than have to use them again (although not by Kuwait air as they are just as bad)

[tartempion]

What TG needs to upgrade is their management class and replace it with professional business personnel as opposed to a social club engaged in crony capitalism. But you have to give them credit on the advertising front as they somehow continue to convince people to fly the over-priced skies of Thai.

I worked 30 years as a management consultant.

My take on management is that in average there are more incompetent people in higher functions than in lower levels.

I will even dare to state that MOST of top management in ANY company is clueless.

I did meet a few brilliant top manager though, I take off my hat for them, not that this did consume much of my time though.

I do respect most of the workers in a company: they make it happen, not the selfish people higher-up.

The higher you go the worse you find

[coolhandjoe]

[thaivisa.com] Thai Airways announces massive...........

debts due to being a unfriendly, unfamily orientated airline subsidised by ?

[harrry]

It may be a good time to lease new planes as prices for them are probably at rock bottom. As a government supported airline they can afford to and itmay bring the turnaround what used to be the worlds best airline needs.

[tw25rw]

I think every airline has it's detractors with horror stories. I have flown TG loads of times, have gold ff status, and will continue to fly them in the future. For the routes I fly they are the best and cheapest option. I could probably save some money and have a better seat by compromising and spending hours in the Middle East in the middle of the night, but with TG I don't need to.

So until I have a run of horror flights, I'll continue to fly them and look forward to the new planes..

[webfact]

THAI looks to fund new planes

By THE NATION

Thai Airways International is seeking Bt10 billion to add 81 new aircraft over 15 years, thereby reducing maintenance costs and improving the fleet in line with travel demand on each route.

"The aircraft acquisition plan will take place in parallel with the capital increase. THAI is asking the Finance Ministry to inject Bt10 billion to maintain its 51.03-per-cent stake," Transport Minister Sophon Saram said yesterday.

The flag carrier's major shareholders are the Vayupak I Fund, 17.2 per cent; Thai NVDR, 4.5 per cent; Omsin Mutual Fund, 2.73 per cent; Mellon Bank, 1.54 per cent; Citibank Nominees Singapore/UBS (London branch)/NRB, 0.96 per cent; Nortrust Nominees/NTGS, 0.89 per cent; and the Social Security Fund, 0.87 per cent.

THAI has registered capital of Bt16.99 billion.

Chairman Ampon Kittiampon last December said the national carrier would issue new shares and bonds to refinance its short-term debts with longer-term obligations. A capital increase plan will be completed in March or April.

Sophon said THAI needed new aircraft, but that required a huge amount of money. Seventy-seven aeroplanes will be replaced.

The aircraft will be procured over three phases - 15 between now and 2014, 38 from 2015-19 and 28 from 2020-24. That will bring the fleet to 101 aircraft, consisting of six models: the Airbus A380, Boeing 747-400, Boeing 777, Boeing 787, Airbus A350 and Airbus A330-300.

The company's board on Monday approved the first acquisition stage: Bt35.5 billion for seven aircraft to be purchased for regional routes and eight to be leased for 10-15 years and put on long-haul routes.

President Piyasvasti Amranand said the detailed acquisition plan will be submitted to the Transport Ministry and the National Economic and Social Development Board before seeking Cabinet approval. In the interval, THAI will need to lease a few aircraft to ease the shortage.

THAI yesterday held a media briefing complete with flight simulations, using various scenarios showing how pilots resolve problems that may arise during a flight.

The event was aimed at showing the public the company's priority in maintaining safety standards.

-- The Nation 2010-02-11

[newsfooter][/newsfooter]

[moetownblues]

I wont fly Thai, there more expensive than Qantas.

Are you serious? Qantas is far more expensive than Thai airways. Qantas is one of the most expensive in the world. Personally I like Thai Airways, the staff are very friendly and the service is excellent, I use them every month from Aust to Thai. I trust the planes more than I do the Qantas ones which have pieces falling off them all the time of late. The maintenance is done in Indoneasia by Indoneasians and we all know how many Indoneasian planes fall out of the sky.

Apart from that I do not know why Thailand needs so many more planes as they are not filling the ones they have now. Flying every month I have noticed them to be at about 75% capacity which is good for me when I check in I always get seat either 60 or 71 depending on the plane right up the back and end up having all 3 seats to lay down.

[wkbglobal]

What TG needs to upgrade is their management class and replace it with professional business personnel as opposed to a social club engaged in crony capitalism. But you have to give them credit on the advertising front as they somehow continue to convince people to fly the over-priced skies of Thai.

I worked 30 years as a management consultant.

My take on management is that in average there are more incompetent people in higher functions than in lower levels.

I will even dare to state that MOST of top management in ANY company is clueless.

I did meet a few brilliant top manager though, I take off my hat for them, not that this did consume much of my time though.

I do respect most of the workers in a company: they make it happen, not the selfish people higher-up.

The higher you go the worse you find

Is there not a saying that goes - you are promoted to your highest level of incompetency?

In all my travels I would rather fly with an Asian carrier than European or American any day. I come across more unpleasant crews and inflexability with these operators than Asian.

The times I have flown with Thai I have found them very courteous, good service, good legroom and clean aircraft although I do agree they are not the top of the Asian list and the In flight entertainment must be upgraded to compete. Unfortunately most of the National Carriers have stayed still. The EVA service from London is very good although my Company recently sent me to Los Angeles via EVA routing through Taiwan and I would certainly have preferred the direct flight with Thai - in fact the pricing was very competitive when I checked.

As for pricing I always find the National Carrier of the country you are in is always more expensive. EG On a trip to Jordan from the UK I flew out via Charles De Gaul with Air France due to cost. In Jordan I met an associate who lived near Paris and flew out via Heathrow on BA due to the cost being cheaper than Air France. Both fares were similar but both operators were offering lower fares to get the competitions business rather than focusing on building a loyal "local" client base.

Edited February 12, 2010 by wkbglobal

[DrTom]

I read the comments about fuel prices and efficiency. I can add one bit of information relative to domestic flights in the USA, which does provide an interesting data point vis-a-vis this discussion. Princing in the USA is not linked to fuel consumption.

If I fly non-stop direct, the cost is X. If I am willing to tolerate one stop, the price is x/2. If I am willing to tolerate two stops, the price is x/3. In short the cost of the route is based on first degree price discrimination.

If the price were related to fuel cost, then the non stop flight would be the least expensive, since it requires much less fuel.

I am sure that airline ticket prices are influence by fuel cost, but that is not the major determinant. The airlines practice "yield management" and they want to extract the maximum dollar from each seat, independent of the cost of fuel. The price is not determined by fuel cost, but by oligopolistic price discrimination.

[Bagwan]

"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 are spares, in case of engine failures.

And major overhauls.

The RTAF cannibalised so that of the 10 or 12 Harriers they obtained only one is still flying. I wonder how much of that aircraft is still OED.