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Thai (TG) "May" Cancel A380 And Studying 748i

Tue Nov 21, 2006 10:50 pm

http://www.bangkokpost.com/Business/18Nov2006_biz45.php

TG fleet expansion put on hold

BOONSONG KOSITCHOTETHANA

Thai Airways International is waiting for a signal from the new government before following through with plans to cancel its order for six Airbus A380 superjumbos and buy a fleet of new wide-body jets, executives said. All options are still on the table for the national carrier's multi-billion-dollar fleet expansion, which includes six long-range planes and eight medium-range aircraft. Any decisions are likely to be based on the company's financial position, the new government's policy and the views of the new THAI board of directors, chaired by coup co-leader ACM Chalit Phukphasuk.

One option under discussion is to cancel orders for the six A380s, valued at more than $1.7 billion, and replace them with other types of aircraft in order to meet expected traffic demand in 2009, when the first three superjumbos were originally expected. The other three would come the following year.

But last month Airbus, the aircraft maker controlled by aerospace group EADS, said problems with the A380 development would lead to two-year delivery delays and a profit shortfall of 4.8 billion euros.

In Osaka yesterday, Wallop Bhukkanasut, THAI's executive vice-president for commercial operations, confirmed to Reuters that the airline did not rule out terminating the A380 orders. Thai Airways had planned to use the superjumbos on some of its most popular routes, from Bangkok to Frankfurt, London and Tokyo.

THAI executives in Bangkok said the airline had been actively discussing all issues surrounding the A380 delivery delay, including the provision of penalty fees.

''Yes we're talking with them but we have no desire to put the issues in the news,'' said one executive.

THAI planners are now looking at jetliners with large capacity and long-range capability, such as the Boeing 747-8, the new generation of 36-year-old Boeing 747 jumbos, or the a long-range four-engine Airbus that can carry up to 380 passengers.Meanwhile, the carrier is still weighing the merits of two competing types of medium-range aircraft: the Boeing 777- 200, and the A330-300 twin-jet jetliner, which costs $140 million each and can seat 295 passengers.

A proposal to purchase A330-300s was suddenly pulled from the agenda of THAI's Sept 22 board meeting as questions arose as to whether the airline had properly compared the European-made jets with their American-made counterparts, executives said.

THAI plans to phase in the eight new regional jets into its fleet over the next three to five years. They will replace eight of the airline's 22 A300-600s that have been in service for 20 years.
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NYC777
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RE: Thai (TG) "May" Cancel A380 And Studying 748i

Tue Nov 21, 2006 10:54 pm

Strange that there is no talk of the 787. Thai CEO a year or two ago had praised the 787 but so far no orders yet. Just talk of the 748I and the 777ERs. I wonder if the 773ER would be part of the mix?
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kappel
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RE: Thai (TG) "May" Cancel A380 And Studying 748i

Tue Nov 21, 2006 11:24 pm

Quoting NYC777 (Reply 1):
I wonder if the 773ER would be part of the mix?

With TG everything is possible. They have even a weirder mix of aircraft than SAS. Who knows, maybe more a346's? Airbus has some cancelled orders they can probably offer with a big discount due to cancellation charges. Perhaps airbus can offer them in combination with a380 compensation. A lot also depends on the vision of the new government apparantly.
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Stitch
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RE: Thai (TG) "May" Cancel A380 And Studying 748i

Tue Nov 21, 2006 11:38 pm

Quoting NYC777 (Reply 1):
Just talk of the 748I and the 777ERs. I wonder if the 773ER would be part of the mix?

Well if they need planes "now", the 777 family is probably the best. We know new-build A346s are not immediately available so I assume that also applies to new-build A343s.

Personally, I am skeptical of a 748I order if they cancel the A388. More likely a mixed 772ER and 773ER order with some nice "package pricing" by Boeing.
 
trex8
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RE: Thai (TG) "May" Cancel A380 And Studying 748i

Tue Nov 21, 2006 11:47 pm

Quoting Stitch (Reply 3):
We know new-build A346s are not immediately available so I assume that also applies to new-build A343s.

if EK have really cancelled their A346 order (whether you think its 10 or 18 or whatever number) why is it that no one can get even a handful of A346s in the next 2 years?? I can't believe the long lead time for A330s is so short, Airbus can change a A346 slot on the production line in 07 to an A330 with only a year or less notice.
 
Rj111
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RE: Thai (TG) "May" Cancel A380 And Studying 748i

Tue Nov 21, 2006 11:51 pm

TG have had trouble with Etops in the past. Which is worth noting.

[Edited 2006-11-21 15:54:16]
 
aa1818
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RE: Thai (TG) "May" Cancel A380 And Studying 748i

Wed Nov 22, 2006 12:57 am

To me, this sounds like it is probable that Thai will cancel it's A380s. However what it chooses it totally up in the air- since thay are evaluating the 747 along with A346, but wouldn't do that without the B773ER. And they are looking at the B772 and A333 but wouldn't do that without looking at the 787 and A350, so without explicitly stating that they are evaluating all of those types, i'm sure they are evaluating all and perhaps are mentioning the ones which tickle their fancy at this moment. I wouldn't be suprised to see Thai go straight back to the drawing board on fleet decisions if the Gov't/ Management cancels the A380 order.

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Stitch
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RE: Thai (TG) "May" Cancel A380 And Studying 748i

Wed Nov 22, 2006 1:11 am

Quoting Trex8 (Reply 4):
If EK have really cancelled their A346 order...why is it that no one can get even a handful of A346s in the next 2 years? I can't believe the long lead time for A330s is so short, Airbus can change a A346 slot on the production line in 07 to an A330 with only a year or less notice.

It depends on when EK was slated to take those planes. It may very well be that the first plane was getting to the point that components for it would be ordered from suppliers, even if assembly of those components on the line would not begin for some time. And it is unlikely EK's planes would be built in serial.

So EK may very well have opened a single "slot" twelve or more months in the future. And since EK knew they were not going to take them, would have informed Airbus of that fact well before Airbus started to source the parts. Assuming Airbus was unable to find a buyer prior to having to start sourcing those parts, they would not source them and that "slot" is now gone.

Add to that the rash of A330 orders with "near term" deliveries plus the handful of A343s ordered, and it is quite possible that all of those A346 slots are now filled with A330s or A340s for other customers. So, like the 787, any new orders - even for cancelled slots - will now fall to the "back of the line", now years later.
 
trex8
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RE: Thai (TG) "May" Cancel A380 And Studying 748i

Wed Nov 22, 2006 2:55 am

Quoting Stitch (Reply 7):
It depends on when EK was slated to take those planes.

per JP Fleets, 4 were due for delivery 07, 6 in 08 (plus 2 ILFC leased ones) and 8 in 09. Seems to me unless A were told early this year about the cancellations (or at least that they would be deferred), long lead items for 07 delivery slots would be already in the pipeline. Don't stuff like landing gears need year to two lead times?
 
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Stitch
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RE: Thai (TG) "May" Cancel A380 And Studying 748i

Wed Nov 22, 2006 3:04 am

Quoting Trex8 (Reply 8):
per JP Fleets, 4 were due for delivery 07, 6 in 08 (plus 2 ILFC leased ones) and 8 in 09. Seems to me unless A were told early this year about the cancellations (or at least that they would be deferred), long lead items for 07 delivery slots would be already in the pipeline. Don't stuff like landing gears need year to two lead times?

Thank you for the information. So chances are at least four could have been "in the pipeline" with suppliers, at least.

I want to say EK has been mumbling for some time about not taking the A346s, even if only recently they have been formally stating they have cancelled. So perhaps Airbus has already allocated those six 2007 slots and perhaps the 08 or even 09 slots are the first ones available, which would track with what I have heard on this forum.
 
kaitak
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RE: Thai (TG) "May" Cancel A380 And Studying 748i

Wed Nov 22, 2006 3:07 am

My gut feeling is that they won't. They may be impatient with Airbus, as many airlines are and they may use this issue to get a better compensation package from Airbus (we know what some airlines, like QF and LH have got, but not Thai).

At the end of the day, don't forget national pride. With MH and SQ having 380s, does Thailand's new government want to deny its airline - which it undoubtedly wants to see at the frontline of Asian aviation, along with its new airport - the same aircraft? I doubt it. OK, not the most technical explanation, BUT don't discount the importance of national pride in something like this. And I would expect to see TG get a handsome compensation package, including a very good deal on A330-300s, as a result of staying on board.

And you can bet the French government will do no little amount of schmoozing as well!
 
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RE: Thai (TG) "May" Cancel A380 And Studying 748i

Wed Nov 22, 2006 3:28 am

Gut reaction is that the biggest proponent of the Thai A380 may have been the ex-Prime Minister who was also the richest man in Thailand. Without him as chairman of the board, and he was supposedly a dictator-like figure, the A380 may never happen. Maybe nobody at Thai actually wanted the A380. Maybe it was a prestige item for the ousted PM. Anyway, that could explain why changes are afoot.
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