Thai Airways to propose securing 28 new planes over 5 years

[webfact]

Thai Airways to propose securing 28 new planes over 5 years
By   THE NATION

 

BANGKOK: -- THAI AIRWAYS International will next month propose to its board the procurement of 28 new aircraft over five years to replace those gradually going out of service.

 

“We want to maintain our base. We have 100 aircraft and want to maximise  [their] efficiency. If we do not increase flights or frequencies, we can stay with 100 aircraft,” Usanee Sangsingkeo, acting president of the flag carrier, said after the THAI board meeting late on Wednesday.

 

“Today, we’re profitable and can manage. The [details] of the procurement will be waiting for the manufacturers’ proposed specifications and prices,” she said.

 

Of the 28 new deliveries, 19 will go to THAI and nine to Thai Smile, THAI’s wholly owned subsidiary. 

 

After the fleet-modernisation plan is submitted to the board, it will be forwarded to the State Enterprise Policy Office and then the Cabinet in August so that orders can be placed starting in the fourth quarter.

 

Areepong Bhoocha-oom, THAI chairman and permanent secretary of the Energy Ministry, said the aircraft-procurement plan would follow the 2012 regulation that requires several committees’ consideration.

 

The first committee has completed its consideration and will file a letter of intent with aircraft manufacturers next month. 

 

The investment model has not been finalised yet, whether it will be a purchase or lease, as that will depend on the planned decommissioning of aircraft. 

 

Regarding THAI’s decision not to increase Nok Air’s capital, Usanee said the low-cost carrier did not present clear management and financial plans, while insisting THAI has given full assistance to Nok Air.

 

If Nok Air’s board agrees on the capital-mobilisation plan with good conditions for the second time, THAI, which holds 21.5 per cent of Nok Air, is ready to subscribe to Nok’s capital-increase shares. 

 

Nok Air capital plan

 

“THAI will not be affected financially if it purchases new shares of Nok Air, as we have enough EBITDA,” Usanee said, referring to earnings before interest, tax, depreciation and amortisation. 

 

“But we have to be aware of THAI as a state enterprise and of its shareholders. If Nok Air has a specific plan and gives us a return on investment, it’ll be acceptable. 

 

“We have to wait and see what Nok Air proposes and who its strategic partners are,” she said.

 

THAI’s board at a recent meeting assigned Somchai Sujjapongse, permanent secretary of the Finance Ministry and chairman of the nomination committee for THAI president, to expedite the opening of the second round of applications for the president’s position.

 

In the first round, four candidates did not meet THAI’s requirements. There are two qualifications for THAI president – excellent knowledge and expertise in management , and communication with its employees to drive its reform as targeted.

 

The board did not give the green light to the resumption of Bangkok-Vienna services at this meeting, citing the need for further study.

 

The procurement plan is for 10 Boeing 747-400 aircraft, seven Boeing 777s and two Boeing 737s for THAI. 

 

Thai Smile plans to have nine Airbus A320 aircraft be out of service after the rent contract’s expiration is approaching.

 

Last quarter, THAI recorded an average cabin factor of more than 80 per cent, higher than in the same quarter of last year, while its reservations for next quarter are 9 per cent higher, Usanee said. 

 

Source: http://www.nationmultimedia.com/news/business/corporate/30318188

 

-- © Copyright The Nation 2017-06-16

[ChrisY1]

And they really need them!

Some of those old 777s are crap!......should also change the hosties that are far older, and more worn out, than the aircraft!

[Wiggy]

"The procurement plan is for 10 Boeing 747-400 aircraft, seven Boeing 777s and two Boeing 737s for THAI."

 

This could be somewhat difficult as Boeing don't manufacture the 747-400 anymore. Either they're planning to buy used aircraft, or they mean the 747-8i. The 777 and 737 are still in production, but the type is not mentioned.

 

That said, the airline do currently have 10 x 747-400s in service aged from 14-24 years old and 2 x 737-400s aged around 24 years each, plus some aging 777-200s, so maybe these are the numbers to be retired rather than procured. Terrible reporting if true.

[fruitman]

I hope they also order bigger and better foodportions or they will never see me in those planes again.

[geovalin]

3 hours ago, webfact said:

Thai Smile plans to have nine Airbus A320 aircraft be out of service after the rent contract’s expiration is approaching.

What does it mean?

out of service = don't use any more.

So " The procurement plan is for 10 Boeing 747-400 aircraft, seven Boeing 777s and two Boeing 737s for THAI.  " = 19 planes, not 28.

 

Or maybe the 9 "out of service" Airbus will be replaced. 19 + 9 = 28

By what? 

[aZooZa]

1 hour ago, Wiggy said:

"The procurement plan is for 10 Boeing 747-400 aircraft, seven Boeing 777s and two Boeing 737s for THAI."

 

This could be somewhat difficult as Boeing don't manufacture the 747-400 anymore. Either they're planning to buy used aircraft, or they mean the 747-8i. The 777 and 737 are still in production, but the type is not mentioned.

 

That said, the airline do currently have 10 x 747-400s in service aged from 14-24 years old and 2 x 737-400s aged around 24 years each, plus some aging 777-200s, so maybe these are the numbers to be retired rather than procured. Terrible reporting if true.

Quite. I think the words "the replacement of" were left out.

[madmitch]

3 hours ago, webfact said:

Today, we’re profitable and can manage

Their 2016 profit was a tiny fraction of the cost of one new aircraft!

[KamnanT]

1 hour ago, Wiggy said:

"The procurement plan is for 10 Boeing 747-400 aircraft, seven Boeing 777s and two Boeing 737s for THAI."

 

This could be somewhat difficult as Boeing don't manufacture the 747-400 anymore. Either they're planning to buy used aircraft, or they mean the 747-8i. The 777 and 737 are still in production, but the type is not mentioned.

 

That said, the airline do currently have 10 x 747-400s in service aged from 14-24 years old and 2 x 737-400s aged around 24 years each, plus some aging 777-200s, so maybe these are the numbers to be retired rather than procured. Terrible reporting if true.

I was thinking the same thing - Boeing isn't making the 747-400 anymore and even if they did, most airlines are phasing out the 747, primarily due to its relatively high cost of operation vs. more modern, twin-engined aircraft.  Both Singapore Airlines and Cathay have retired all of their 747 fleets.  Even the A380 order book is looking pretty thin.  I suspect the reporter has confused "what's being replaced" and "what's being acquired".

[laocowboy2]

1 hour ago, Wiggy said:

"The procurement plan is for 10 Boeing 747-400 aircraft, seven Boeing 777s and two Boeing 737s for THAI."

 

This could be somewhat difficult as Boeing don't manufacture the 747-400 anymore. Either they're planning to buy used aircraft, or they mean the 747-8i. The 777 and 737 are still in production, but the type is not mentioned.

 

That said, the airline do currently have 10 x 747-400s in service aged from 14-24 years old and 2 x 737-400s aged around 24 years each, plus some aging 777-200s, so maybe these are the numbers to be retired rather than procured. Terrible reporting if true.

Terrible reporting I believe. Much of the existing fleet is either clapped out or grossly fuel-inefficient -m or both. As well as needing new aircraft, there are strategic decisions to be made. Thai is in the Star Alliance but that is about it. Code share arrangements are somewhat limited. Also, do they want to concentrate on the region or also compete long haul? Do it all themselves or (apart from a few key routes) do a deal to funnel passengers into another carrier's network (as Qantas does with Emirates)? The answers to these questions should inform the fleet shape/size decision. Buying the planes first would be cart before horse. Hopefully these matters have already been trashed out internally.

[geovalin]

10 minutes ago, KamnanT said:

I was thinking the same thing - Boeing isn't making the 747-400 anymore and even if they did, most airlines are phasing out the 747, primarily due to its relatively high cost of operation vs. more modern, twin-engined aircraft.  Both Singapore Airlines and Cathay have retired all of their 747 fleets.  Even the A380 order book is looking pretty thin.  I suspect the reporter has confused "what's being replaced" and "what's being acquired".

This could explain the " Thai Smile plans to have nine Airbus A320 aircraft be out of service after the rent contract’s expiration is approaching. "

 

10 + 7 + 2 + 9 = 28 planes will be OUT.

Which planes will be IN, if any?

 

[Wiggy]

17 minutes ago, geovalin said:

This could explain the " Thai Smile plans to have nine Airbus A320 aircraft be out of service after the rent contract’s expiration is approaching. "

 

10 + 7 + 2 + 9 = 28 planes will be OUT.

Which planes will be IN, if any?

 

Precisely. The article is about procurement of aircraft, and yet mentions nothing about it. Typical.

[Cadbury]

Will they all be powered by Rolls Royce engines?

Is it reasonable to assume the same Thai Airways people involved in the purchase of these planes will be the same ones who purchased the Rolls Royce engines? 

Cha ching! 

[namoi]

My thaughts exactly

[Stargeezr]

B747 are going to be replaced, except for those that may be the freighters.  B777 and B787 as

well as B737 are still being manufactured  and may be part of the newer fleet.

Geezer

[Dobredin Ghusputin]

6 hours ago, webfact said:

THAI’s board at a recent meeting assigned Somchai

 

Alright then.

 

[Srikcir]

6 hours ago, webfact said:

“Today, we’re profitable and can manage.

So why not continue as is?

After all their economic model works, "If we do not increase flights or frequencies, we can stay with 100 aircraft."  When aircraft needs to be replaced, do as a lease that keeps the cost off the balance sheet and maintains stockholder value.

 

[natway09]

rather than burst into print with wrong info suggest the reporter in this instance finds out the facts first

[tso310]

1 hour ago, natway09 said:

rather than burst into print with wrong info suggest the reporter in this instance finds out the facts first

Yes, rather a poor article. Thai has to replace some rather old 747s, 737s, and 777s sooner rather than later. The bigger problem for Thai is domestic and regional flights and whether they should move these flights to Smile. With a lower operating cost base they are better suited to feed into Thais long haul network out of BKK. Also I can't quite work out what their attitude is towards Nok. While Nok may operate out of DMK it must still feed quite a few people to BKK as it does fly to many destinations in Isaan that have no direct links with BKK.

[jackinthebox]

No word of Airbus A380? Isn't Thai a typical long-haul airline? Plus they have already the infrastructure for this aircraft at Swampy.

[Searat7]

I believe the numbers shown include the active fleet only. There are 9 Airbus 340's among other "stored" planes which have not been used in years so they must be rotting. There were 10 but the Air Force took one. Check out airfleets.net

[oldies1]

On vrijdag 16 juni 2017 at 3:20 AM, fruitman said:

I hope they also order bigger and better foodportions or they will never see me in those planes again.

ABSOLUTELY !

For me it's the only airline who flies directly from Brussels to Bangkok.

Some of the cabin staff is really rude (seen that last year on the flight back)

and the food... really a lot of crap and shamelessly small portions. I know we're

not in a flying restaurant, but still.... I flew with A LOT of airlines worldwide

over the years, so I can compare objectively