THAI chief tenders resignation

[metisdead]

A round and round bickering session has been removed.

[Ricardo]

Good point, re Chairman vs CEO, I'd wondered about that too.

But "4 leased aircraft out of 125", I believe that before the recently/currently-arriving B777s came, Thai were short-term leasing other B773s from Jet Airways (of India), which have now all been returned ?

However the move towards 12-year-leased aircraft in future, does suggest a strategic decision to change from the Board back in June-2011, which incidentally was just weeks before the change in government, I can't help wondering (in my relative ignorance) whether there was something political going-on there ?

Would leasing versus ownership have something to do with the weakening baht?

Possibly, but a Board taking a long-term view on a currency is still a gamble, IMO. But arguably all business is a gamble at heart, taking a view on the sort of returns to be earned, with an expensive fixed-asset. One nice thing about aircraft, as opposed to say factories, is that they can be redeployed more easily, if the market changes in an unexpected way.

Perhaps they were reacting to a long-term indication, from government or the other poor shareholders, that further capital-injections might not be forthcoming ?

While airlines can sometimes make good profits, on selling heavily-written-down owned-aircraft into a strong market, they can also lose heavily, for example of A340s when no-longer-needed because the specific ultra-long-haul routes they were bought for, turned out to be unprofitable ?

I've known an airline sell a couple of older planes, to an eager new start-up competitor, to boost profits during an otherwise-lacklustre year. One might also inject them into a new part-owned subsidiary, think older B734s into Nokair, as a way of disposing of them.

The thing about leasing is, you know you have the planes available to operate in the medium-term, but you're only paying for them (usually at a higher monthly rate than depreciating an owned-aircraft) as they're earning profit for you. The income and outgoings being hopefully either balanced, part-balanced or hedged to some extent. It's a highly-specialised area.

My own direct experience of this is now 25-years ago.

[ginjag]

Good point, re Chairman vs CEO, I'd wondered about that too.

But "4 leased aircraft out of 125", I believe that before the recently/currently-arriving B777s came, Thai were short-term leasing other B773s from Jet Airways (of India), which have now all been returned ?

However the move towards 12-year-leased aircraft in future, does suggest a strategic decision to change from the Board back in June-2011, which incidentally was just weeks before the change in government, I can't help wondering (in my relative ignorance) whether there was something political going-on there ?

Would leasing versus ownership have something to do with the weakening baht?

Possibly, but a Board taking a long-term view on a currency is still a gamble, IMO. But arguably all business is a gamble at heart, taking a view on the sort of returns to be earned, with an expensive fixed-asset. One nice thing about aircraft, as opposed to say factories, is that they can be redeployed more easily, if the market changes in an unexpected way.

Perhaps they were reacting to a long-term indication, from government or the other poor shareholders, that further capital-injections might not be forthcoming ?

While airlines can sometimes make good profits, on selling heavily-written-down owned-aircraft into a strong market, they can also lose heavily, for example of A340s when no-longer-needed because the specific ultra-long-haul routes they were bought for, turned out to be unprofitable ?

I've known an airline sell a couple of older planes, to an eager new start-up competitor, to boost profits during an otherwise-lacklustre year. One might also inject them into a new part-owned subsidiary, think older B734s into Nokair, as a way of disposing of them.

The thing about leasing is, you know you have the planes available to operate in the medium-term, but you're only paying for them (usually at a higher monthly rate than depreciating an owned-aircraft) as they're earning profit for you. The income and outgoings being hopefully either balanced, part-balanced or hedged to some extent. It's a highly-specialised area.

My own direct experience of this is now 25-years ago.

Thinking about the A340s what is the solution, keep them indefinitely in hope someone buys---or sell at a lower price like sell to buy 1 new ??? leasing them off would be difficult as they are supposed to be fuel eaters. But with fuel prices being lower than they were years ago on the non stop routes they were built for and say 90% full, couldn't they be used on popular routes rather than standing. just a thought.

[Ricardo]

Thinking about the A340s what is the solution, keep them indefinitely in hope someone buys---or sell at a lower price like sell to buy 1 new ??? leasing them off would be difficult as they are supposed to be fuel eaters. But with fuel prices being lower than they were years ago on the non stop routes they were built for and say 90% full, couldn't they be used on popular routes rather than standing. just a thought.

Good question, they had the chance to sell one recently (at a book loss ?), to some Saudi prince IIRC, but turned it down.

They were using them to substitute for B744s on the London-run (and others ?), during the off-season, reducing capacity but only empty seats anyway.

It's hard to believe that leaving them standing on the tarmac is the least-cost use for them, but one would have to be a financial/marketing/commercial-type inside Thai Airways, to be able to see the full numbers and make any sort of real judgement or suggestions. Does Thai culture, or political management within TG, permit that sort of entrepreneurial-thinker to operate ?

One serious alternative might be to 'sell' them to the government, as their new long-haul diplomatic-fleet, where they don't need to fly so often anyway ? But perhaps there are other 'considerations', to be taken into account, in the PTP's reported-decision to want to buy their own planes. It's a matter of what's best or least-expensive, for the country as-a-whole, perhaps ?

One would hope that the A340s aren't deteriorating, just sat on the ground, and that they are flying occasionally at least.

[ginjag]

Thinking about the A340s what is the solution, keep them indefinitely in hope someone buys---or sell at a lower price like sell to buy 1 new ??? leasing them off would be difficult as they are supposed to be fuel eaters. But with fuel prices being lower than they were years ago on the non stop routes they were built for and say 90% full, couldn't they be used on popular routes rather than standing. just a thought.

Good question, they had the chance to sell one recently (at a book loss ?), to some Saudi prince IIRC, but turned it down.

They were using them to substitute for B744s on the London-run (and others ?), during the off-season, reducing capacity but only empty seats anyway.

It's hard to believe that leaving them standing on the tarmac is the least-cost use for them, but one would have to be a financial/marketing/commercial-type inside Thai Airways, to be able to see the full numbers and make any sort of real judgement or suggestions. Does Thai culture, or political management within TG, permit that sort of entrepreneurial-thinker to operate ?

One serious alternative might be to 'sell' them to the government, as their new long-haul diplomatic-fleet, where they don't need to fly so often anyway ? But perhaps there are other 'considerations', to be taken into account, in the PTP's reported-decision to want to buy their own planes. It's a matter of what's best or least-expensive, for the country as-a-whole, perhaps ?

One would hope that the A340s aren't deteriorating, just sat on the ground, and that they are flying occasionally at least.

I agree with what you say, Planes need the engines turning servicing of sorts even if they are standing, this is cost.

I did learn from a colleague that a less thirsty aircraft with less range that has to refuel sort of halfway, is more expensive than the thirstier A340 non stop. Just another thought.

Thai Airways are supposed to have, through it's long history in the business brains enough to run efficiently, but if what's reported that their are so many hangers on being given freebies in First/business no wonder they are 13 billion in the red.

I am no expert but nice to share points of view.