Thai Airways to delay taking delivery of 14 planes to cut costs

[webfact]

Thai Airways to delay taking delivery of 14 planes to cut costs

* To delay taking delivery of 12 Airbus 350s, 2 Boeing 787s
* Plans to sell 19 offices at home and abroad, 14 planes (Adds comments on asset sale plan)

BANGKOK: -- Jan 21 Thai Airways International Pcl plans to postpone taking delivery of 14 planes for three years to reduce operating costs as the national airline restructures, it said on Wednesday.

The 14 planes include 12 Airbus 350s, of which two that were due to be delivered this year, and two Boeing 787s, President Charumporn Jotikasthira told a news conference.

"We will negotiate with aircraft makers to postpone the delivery due from 2016 to 2018," he said.

Full story: http://www.reuters.com/article/thai-airways-planes-idUSL3N1543XA

-- Reuters 2016-01-21

[webfact]

Thai Airways to sell off property in March
BY LARRY BANKS



BANGKOK: -- According to an article in the Bangkok Post, Thai Airways International plans to sell off some domestic and overseas offices and residences as part of a cost-saving initiative.

President of the company Charamporn Jotikasthira said on Wednesday that the offices to be sold are in Mae Hong Son, Phitsanulok, Udon Thani, Nan, Trang, Surat Thani and Phuket, and two more in the Hat Yai district of Songkhla.

Additionally, staff residences in London, Jakarta, Copenhagen and Singapore are also included, as well as sales offices in Sydney, Rome, Madrid, Hong Kong and Penang, he said. The airline’s two residences in Singapore are also to be sold.

The plan will be announced in March and the airline is expected to earn upwards of 1 billion Baht ($27.5 million) on the deals which will save overseas expenses and maintenance costs.

Full story: http://ethailand.com/business-news/thai-airways-property-sell-off/1433/

-- eThailand 2016-01-21

[webfact]

Thai Airways strapped for cash, selling off planes and property
By Coconuts Bangkok

BANGKOK: -- Thai Airways plans to sell planes and unused properties as it restructures and tries to raise extra cash.

The money-losing national airline also plans to postpone taking delivery of 14 planes for three years to reduce operating costs, it said yesterday.

The 14 planes include 12 Airbus 350s, of which two that were due to be delivered this year, and two Boeing 787s, President Charumporn Jotikasthira told a news conference.

"We will negotiate with aircraft makers to postpone the delivery due from 2016 to 2018," he said.

Full story: http://bangkok.coconuts.co/2016/01/21/thai-airways-strapped-cash-selling-planes-and-property


-- Coconuts Bangkok 2016-01-21

[PaullyW]

In other words,

"We don't have the money. Wait until the end of the month when we get our paycheck. "

[ratcatcher]

Champagne tastes, beer money?

[colinneil]

Why would Thai airways have an office in Mae Hong Son in the first place .They do not even fly there.

[Asiantravel]

I trust along with these measures they will simultaneously also stop handing out free tickets to every Tom Dick and Harry

[Prbkk]

I trust along with these measures they will simultaneously also stop handing out free tickets to every Tom Dick and Harry

True enough but it's to Nok, Lek, Pong, Bird and Somchai in reality

[Pattaya28]

I read that Thailand was expecting more and more visitors. If that's the case, why are they not increasing their fleet ?

I also read "safety" is an issue with 4 major Thai Airlines. Surely now is the chance to improve the "safety" standards.

[ratcatcher]

Why would Thai airways have an office in Mae Hong Son in the first place .They do not even fly there.

1. http://www.domesticflightsthailand.com/MaeHongSon.htm

2. https://www.google.co.th/maps/place/Thai+Airways+International+Public+Company+Limited/@19.3009458,97.9690286,15z/data=!4m2!3m1!1s0x0:0xcdaf1bdc34fc4842

Edited January 21, 2016 by ratcatcher

[GinBoy2]

We'll see how this plays out.

Remember they tried to cancel the A380's until someone spoke up and informed them that their crack negotiating team had signed up for cancellation terms so onerous that they had no choice but to take them.

[trainman34014]

Why would Thai airways have an office in Mae Hong Son in the first place .They do not even fly there.

Don't you know that 'Hi So' management need somewhere quiet to take their Mia Noi's at the weekends ? Many of their 'properties' abroad are for the freeloaders that fly first class around the world and don't want to pay hotel bills while they are there.

[trainman34014]

They still haven't learned that the fastest way to cut costs is to cut heads. Until someone has the balls to cut staff numbers by about 40% the company will never return to profitability.

The way things are going Thai Airways will end up with no aircraft or a bunch of old dilapidated planes, no other properties or assets and still about 22,000 staff 'working' in an empty shell of a once great company !

[ginjag]

To note--------just purchased return tickets --ETIHAD to UK 27,500 baht

Thai near double, flying Boeing 777-er first leg-2 hour leg stretch Abu Dhabi then A 380-second leg.

Thai price near double

Thai very clever at losing customers---but not clever at running the business.

[Ks45672]

I read that Thailand was expecting more and more visitors. If that's the case, why are they not increasing their fleet ?

I also read "safety" is an issue with 4 major Thai Airlines. Surely now is the chance to improve the "safety" standards.

It's cheaper to keep using the old planes until they crash..... "safety" cost too mutt....

[Ricardo]

Why would Thai airways have an office in Mae Hong Son in the first place .They do not even fly there.

But they did use to in the past.

[arithai12]

First, I don't quite understand how delaying the delivery of a plane saves costs. Normally a large fraction has already been paid when ordering, and there must be penalties in the contract if one of the parties is late in delivering or in paying.

Second, if Thai ordered those planes it's not because they collect them, but because they need them - supposedly to boost their traffic, according to some plan. So if they don't get them, they should be losing more money. Unless the new planes were totally unnecessary, in which case the real move would be to take action against those who ordered them.

Third, normally an airline not only buys new planes, but also sells the old ones. So if they take delivery, they could be making some money by selling.

And by the way all this is done by planning months ahead, it's not a morning-to-evening decision.

So, this is just a way to tell the public "look we are doing something", but it's in fact not going to change anything.

The real problem of Thai Airways is the immense number of people they employ, and the benefits. There is no way they can compete in the modern market.

One way of justifying the more costly Thai tickets could have been the service, on the ground and on board, but even that by now is often a shame.

[nong38]

So they expect us to keep travelling on old planes then, is it any wonder that people dont travel on Thai airways? There are far better, newer options around, do try to keep up!

[thaiowl]

Very overstaffed. Look at the revenue per passenger compared with other full service airlines.

[Ricardo]

According to wiki, the B787s and most of the A350s will be on 12-year leases, so TG should be negotiating with the lessors, rather than Airbus & Boeing ?

And the most likely reasons for delaying leased-replacements is surely, either that they don't think they can sell the planes being replaced, or that they don't think they can use the new planes profitably, either would be slightly worrying.

https://en.wikipedia.org/wiki/Thai_Airways

"On 13 June 2011, THAI's Board of Directors announced it would purchase 15 aircraft and acquire the remaining 22 on operating leases. The purchased planes include 14 Boeing 777-300ERs, to be delivered in 2014 and 2015, four Airbus A350-900s (2016 and 2017), and five Airbus A320-200s (2014 and 2015). The leased planes include six 787-8s and two 787-9s from US lessor International Lease Finance (ILFC). The 8 series will be delivered in 2014 and 2015, while the 9 series will be delivered in 2017. In addition, THAI will lease six A350-900s from Aviation Lease and Finance, to be delivered in 2017, and two A350-900s from CIT Aerospace International, which will deliver the aircraft in 2016. The airline will also lease six A320-200s from RBS Aerospace International, to be delivered in 2012 and 2013. All the operating leases have terms of 12 years each.^"

[shunima]

So flying longer with old equipment, cutting on-board services and what's left of it is done by grumpy flight attendants is their new 'survival strategy'? I had the pleasure of flying 'business-class' domestic from CNX to BKK as a feeder flight for the connecting Qatar flight from BKK to DOH. Old A330, unfriendly staff, one dish only (spicy fish on rice), no alcohol served in-flight, no real orange juice, coffee out of paper cups. That was the domestic business class model of Thai Airways. And they expect customers to book their future flights with them. Completely delusional folks...

[hansnl]

The alternative to lessening capacity it trying to raise the number of passengers and the amount of freight on flights.

But that, in business nowadays, is not done.

Laying off people, selling assets, diminishing capacity and other modern management principles give the managers hardon's.

It is called playing manager.

Not one of them has any real ability in using the assets to the maximum.

Oh well.......

[Orac]

The alternative to lessening capacity it trying to raise the number of passengers and the amount of freight on flights.

But that, in business nowadays, is not done.

Laying off people, selling assets, diminishing capacity and other modern management principles give the managers hardon's.

It is called playing manager.

Not one of them has any real ability in using the assets to the maximum.

Oh well.......

Emirates, Qatar and now Singapore Airlines are offerring significant price cuts over the next few months so TG will struggle to maintain load factors even with discounted tickets. The next few months are slso typically quiet for airfreight which will be made even worse with the global slowdown so not much hope there either.

[Prbkk]

The alternative to lessening capacity it trying to raise the number of passengers and the amount of freight on flights.

But that, in business nowadays, is not done.

Laying off people, selling assets, diminishing capacity and other modern management principles give the managers hardon's.

It is called playing manager.

Not one of them has any real ability in using the assets to the maximum.

Oh well.......

The planning has been poor. They must have anticipated a faster economic recovery in Europe( and that inbound touris from Europe would grow), otherwise they would never have added some of those marginal routes like Madrid, Vienna, Milan, Zurich.

Even with the Paris flights economy is half empty while business is inevitably full ...but one wonders now many of those business seats generate full income...many of the passengers would be those redeeming their frequent flyer points, upgrade awards, half point deals, platinum upgrades and the like.

Would would be paying the 130,000 for a ticket is beyond me when a ticket can be had for just over half that with a brief, even somewhat refreshing ,stop enroute

[Searat7]

Once the fuel prices go down again retiring the 747 fleet would make good sense as those planes are getting old. Air France just had their last 747 flight this month. I wonder if they have been able to sell any of the A-340's yet. None of THAI's announcements seem to properly address their bloated payroll. This must be a sacred cow !

[Searat7]

Once the fuel prices go down again retiring the 747 fleet would make good sense as those planes are getting old. Air France just had their last 747 flight this month. I wonder if they have been able to sell any of the A-340's yet. None of THAI's announcements seem to properly address their bloated payroll. This must be a sacred cow !

Correction- once fuel prices go up again...

[GinBoy2]

Once the fuel prices go down again retiring the 747 fleet would make good sense as those planes are getting old. Air France just had their last 747 flight this month. I wonder if they have been able to sell any of the A-340's yet. None of THAI's announcements seem to properly address their bloated payroll. This must be a sacred cow !

Correction- once fuel prices go up again...

But it's all a juggling act.

Jet Fuel is at a decade long low, so then you juggle fuel burn per passenger vs revenue vs aircraft depreciation per passenger.

Now if I were doing the sums, I 'think' without knowing the absolutes, and of course no-one know what their future fuel hedging deals were, although I suspect the worst....than an older fully depreciated aircraft, even with higher fuel burn, but with low fuel price, and if you can load it >80% probably makes more sense.

But hey, whats math, when you have 'Thainess'

[Basil B]

One would think that with the fuel prices in free fall things would be on the up, but in reality other airlines are better managed and will be the ones to benefit...

Thailand would be better off to sell it as a going concern.

Edited January 21, 2016 by Basil B

[Basil B]

I trust along with these measures they will simultaneously also stop handing out free tickets to every Tom Dick and Harry

True enough but it's to Nok, Lek, Pong, Bird and Somchai in reality

Mia Noi's and their families...

[Bangkok Barry]

Why would Thai airways have an office in Mae Hong Son in the first place .They do not even fly there.

Same with Madrid.