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mercure1
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Updated: Thai Airways enters Bankruptcy Protection

Fri Oct 04, 2019 12:41 am

Tthe red ink continues to spill at TG. Things looking far worse in 2019 than envisaged in the carriers restructuring plan.


Thai Transport Minister has expressed concern that the national flag carrier may be in danger of running up net losses of well over 10 billion baht (USD $330m) this year.

He said the financial rehabilitation program implemented nearly a year ago does not seem to be working, noting on Thursday that the airline reported a loss of well over 6 billion baht in the first half of this year alone. "THAI is now in crisis. Its financial status is in a critical condition.

Similarly the government's public debt management committee, chaired by the finance minister, has expressed concern over THAI's liquidity problem and further debt from a planned purchase of 38 aircraft..


Rehab plan 'failing' as THAI losses mount
https://www.bangkokpost.com/thailand/ge ... sses-mount
Last edited by SQ22 on Sun May 31, 2020 8:13 am, edited 1 time in total.
Reason: Title was misleading
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UPlog
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 12:45 am

Almost $1mil loss per day :banghead:

Things are very wrong with TG.
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ewt340
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 12:48 am

You don't say sir?
 
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usdcaguy
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 1:13 am

Would the Thai government ever let TG fail, or is the airline too important politically?
 
TheEuphorian
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 1:17 am

Should have been privatized since 1997.

The only way to fix TG now is to turn it into a semi-LCC/tourist airline AND completely privatize it, sell all the 747/772A/77E/773, remove F ,introduce 10-ab Y in the 77W and Buy-on-Board for anything shorter than 3 hours and acquire narrowbodies.
 
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 1:27 am

TheEuphorian wrote:
The only way to fix TG now is to turn it into a semi-LCC/tourist airline AND completely privatize it, sell all the 747/772A/77E/773, remove F ,introduce 10-ab Y in the 77W and Buy-on-Board for anything shorter than 3 hours and acquire narrowbodies.


That will save some cost, sure, but doesn't address the fundamental problems with Thai. They are chronically inefficient with a bloated structure and far too many staff, especially in office and middle management positions. The senior management are political appointees with limited or no experience, and either have no idea what to do or are not allowed to make the necessary changes due to political meddling.
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maverick4002
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 1:40 am

Would the govt let them fail? I assume other airlines would fill in, would there be a mad rush?
 
moa999
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 3:25 am

Already a bunch of Thai based LCCs that would fill in.
 
FlyingElvii
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 3:30 am

RyanairGuru wrote:
TheEuphorian wrote:
The only way to fix TG now is to turn it into a semi-LCC/tourist airline AND completely privatize it, sell all the 747/772A/77E/773, remove F ,introduce 10-ab Y in the 77W and Buy-on-Board for anything shorter than 3 hours and acquire narrowbodies.


That will save some cost, sure, but doesn't address the fundamental problems with Thai. They are chronically inefficient with a bloated structure and far too many staff, especially in office and middle management positions. The senior management are political appointees with limited or no experience, and either have no idea what to do or are not allowed to make the necessary changes due to political meddling.

The primary focus of national airlines is politics and as a jobs program.
Until they deal with that, they will continue to have issues. It is why this concept always eventually fails.
 
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LAXintl
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 4:02 am

Like others mentioned much of the problem with the trio of SE Asian airlines GA-MH-TG centers on government hand in the operation.

The way things stand even the most efficient aircraft won't change the incompetence of management at these carriers nor structural problems like being bloated and patronage employment location for the government plus an unknown amount of corruption mixed in as well.
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TheEuphorian
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Re: Minister: THAI

Fri Oct 04, 2019 4:42 am

moa999 wrote:
Already a bunch of Thai based LCCs that would fill in.

Even the LCCs are gradually losing money, too.

There was news somewhere saying that SL(Thai Lion Air) is in financial trouble.

Even Thai Airasia lost half of its profits for this year.
 
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Re: Minister: THAI

Fri Oct 04, 2019 5:16 am

TheEuphorian wrote:
moa999 wrote:
Already a bunch of Thai based LCCs that would fill in.

Even the LCCs are gradually losing money, too.

There was news somewhere saying that SL(Thai Lion Air) is in financial trouble.

Even Thai Airasia lost half of its profits for this year.

As for SL, they are in quiet financial trouble mainly due to it's MAX grounding (like it's parent company in Indonesia) does. For FD, I'm not really sure if they are in trouble or not. But LCC competition in Thailand may continue. And what is the fate of PG (Bangkok Airways)?
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 5:48 am

And why would the government not privatize TG? It’s an ego driven show piece? Too many corrupt, government- connected cronies? Fear that it would eventually fail?

If... IF... TG was privatized, given the market economics, does a potentially profitable business model exist?
 
Zinu
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 6:38 am

LAXintl wrote:
Like others mentioned much of the problem with the trio of SE Asian airlines GA-MH-TG centers on government hand in the operation.

The way things stand even the most efficient aircraft won't change the incompetence of management at these carriers nor structural problems like being bloated and patronage employment location for the government plus an unknown amount of corruption mixed in as well.


I am always wondering what these carriers can do differently given that VN (which is also government owned with a minor ANA stakes) has been doing reasonably well in comparison to the counterparts in the region. Having said that, I also understand that the markets in Thailand, Indonesia and Malaysia are much bigger and much more competitive.
 
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 7:10 am

While the fundamental problem may be political intervention and incompetence, I see that the front line issues are network planning and yield management.
TG is pricing itself out of the market and not participating in the Europe-Asia market except for BKK.
LHR is a mix of B77W and A380, where it should be two daily A380's. On the A380, 12 First suites and 12 C seats should be replaced by 120 Y seats to 48C / 555Y seats.
Perhaps even 36C / 615Y could be preferable.

In the short term, what they need to do is create clear connecting banks and price themselves competitively on BKK O&D. In the mid term, they should look at cooperating better with Star partners for feeding.
They need to get load factors up and get people excited about booking them.
 
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 7:10 am

Zinu wrote:
LAXintl wrote:
Like others mentioned much of the problem with the trio of SE Asian airlines GA-MH-TG centers on government hand in the operation.

The way things stand even the most efficient aircraft won't change the incompetence of management at these carriers nor structural problems like being bloated and patronage employment location for the government plus an unknown amount of corruption mixed in as well.


I am always wondering what these carriers can do differently given that VN (which is also government owned with a minor ANA stakes) has been doing reasonably well in comparison to the counterparts in the region. Having said that, I also understand that the markets in Thailand, Indonesia and Malaysia are much bigger and much more competitive.


This is only a casual observation, and there is no doubt the Vietnam government does intervene in VN when it suits them, but VN do seem to be run by some fairly competent people who understand the business. They have a decent product but don't suffer from illusions of grandeur, and while the jury is still out on US service their international growth to date has been fairly slow and measured. VN also has rediculously low labor costs, even by South East Asian standards, although that is predominantly due to Vietnam being a lower cost country than Malaysia or Thailand.
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Waterbomber2
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 7:17 am

RyanairGuru wrote:
Zinu wrote:
LAXintl wrote:
Like others mentioned much of the problem with the trio of SE Asian airlines GA-MH-TG centers on government hand in the operation.

The way things stand even the most efficient aircraft won't change the incompetence of management at these carriers nor structural problems like being bloated and patronage employment location for the government plus an unknown amount of corruption mixed in as well.


I am always wondering what these carriers can do differently given that VN (which is also government owned with a minor ANA stakes) has been doing reasonably well in comparison to the counterparts in the region. Having said that, I also understand that the markets in Thailand, Indonesia and Malaysia are much bigger and much more competitive.


This is only a casual observation, and there is no doubt the Vietnam government does intervene in VN when it suits them, but VN do seem to be run by some fairly competent people who understand the business. They have a decent product but don't suffer from illusions of grandeur, and while the jury is still out on US service their international growth to date has been fairly slow and measured. VN also has rediculously low labor costs, even by South East Asian standards, although that is predominantly due to Vietnam being a lower cost country than Malaysia or Thailand.


The thing about Vietnam is that Vietjet and Bamboo Airways have a huge amount of capacity on order, while Vietnam Airlines is fairly conservative about growth.
The jury is out on whether Vietnam Airlines will be overwhelmed by them or the others wilt away by adding too much capacity.
 
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 7:28 am

Zinu wrote:
LAXintl wrote:
Like others mentioned much of the problem with the trio of SE Asian airlines GA-MH-TG centers on government hand in the operation.

The way things stand even the most efficient aircraft won't change the incompetence of management at these carriers nor structural problems like being bloated and patronage employment location for the government plus an unknown amount of corruption mixed in as well.


I am always wondering what these carriers can do differently given that VN (which is also government owned with a minor ANA stakes) has been doing reasonably well in comparison to the counterparts in the region. Having said that, I also understand that the markets in Thailand, Indonesia and Malaysia are much bigger and much more competitive.


VN doesn't have the baggage of past hubris the way TG/MH/GA has.

TG & MH was badly hit by the Asian Financial Crisis in the 90s. I can say that the effects of that disaster lingers on, even 20+ years after the fact.
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 7:37 am

Waterbomber2 wrote:
RyanairGuru wrote:
Zinu wrote:

I am always wondering what these carriers can do differently given that VN (which is also government owned with a minor ANA stakes) has been doing reasonably well in comparison to the counterparts in the region. Having said that, I also understand that the markets in Thailand, Indonesia and Malaysia are much bigger and much more competitive.


This is only a casual observation, and there is no doubt the Vietnam government does intervene in VN when it suits them, but VN do seem to be run by some fairly competent people who understand the business. They have a decent product but don't suffer from illusions of grandeur, and while the jury is still out on US service their international growth to date has been fairly slow and measured. VN also has rediculously low labor costs, even by South East Asian standards, although that is predominantly due to Vietnam being a lower cost country than Malaysia or Thailand.


The thing about Vietnam is that Vietjet and Bamboo Airways have a huge amount of capacity on order, while Vietnam Airlines is fairly conservative about growth.
The jury is out on whether Vietnam Airlines will be overwhelmed by them or the others wilt away by adding too much capacity.


While true, given the rate of economic growth in Vietnam I think the domestic market at least will absorb the additional capacity. VN have over 60 A321s in service themselves. The Vietnam domestic market is already very large and growing very rapidly.

Where Bamboo will come unstuck IMHO is long haul.
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lazyme
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 9:21 am

It did nothing to help TG that many 787's were grounded for a long time due to RR engine problems.
Flew a 747 to ARN a month ago,in low season.

They could easily have used a 787 to cover that flight .
 
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 9:55 am

May I ask you to focus on the topic and when discussing politics limit it to the subject of this thread, thanks.
 
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 11:28 am

lazyme wrote:
It did nothing to help TG that many 787's were grounded for a long time due to RR engine problems.
Flew a 747 to ARN a month ago,in low season.

They could easily have used a 787 to cover that flight .


This is a significant part of this. The airline was operationally profitable until the 787s were grounded. Their fleet became less flexible and flights were cut, and ironically, the government tightening its oversight of TG and its purchases is making things worse. That's not to say that they don't have a bloated structure though. They absolutely do. But they have been profitable in modern times even with that bloated structure.

In terms of J class capacity, I think they still need that capacity on certain routes. I'm booked on BKK-NRT-BKK in late December/January and the J cabin in the A330 flight appears already 85-90% full while the A380 flight is already 60% full in J 3 months out. By comparison the J cabin on NH's NRT-IAD-NRT flights at those times has 5 seats booked.
 
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 12:18 pm

lazyme wrote:
It did nothing to help TG that many 787's were grounded for a long time due to RR engine problems.
Flew a 747 to ARN a month ago,in low season.

They could easily have used a 787 to cover that flight .


Eight 787s aren't worth a $million a day in profit. Looking to place blame elsewhere doesn't fix the problem. This is an overheads/labor productivity issue. Privatizing doesn't inherently fix that - unless it comes with the ability to staff with the numbers and kinds of people you want.
 
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri Oct 04, 2019 3:15 pm

usdcaguy wrote:
Would the Thai government ever let TG fail, or is the airline too important politically?


Airlines like TG, MH, AI, AZ, etc. should have been liquidated long years ago. It is so absurd to have an airline company that represents the pride an aspirations of a nation that it cannot be gotten rid of, and is so stuffed with unprofitable employees and aircraft that it bleeds billions (of bahts, euros, or whatever).
 
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mercure1
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Mon Oct 07, 2019 5:04 pm

TG president denying reports that it is experiencing a liquidity crunch stating carrier has sufficient cash flow “for present and future operations”.

https://thethaiger.com/news/business/no ... -president
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DCA350
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Mon Oct 07, 2019 5:49 pm

Waterbomber2 wrote:
While the fundamental problem may be political intervention and incompetence, I see that the front line issues are network planning and yield management.
TG is pricing itself out of the market and not participating in the Europe-Asia market except for BKK.
LHR is a mix of B77W and A380, where it should be two daily A380's. On the A380, 12 First suites and 12 C seats should be replaced by 120 Y seats to 48C / 555Y seats.
Perhaps even 36C / 615Y could be preferable.

In the short term, what they need to do is create clear connecting banks and price themselves competitively on BKK O&D. In the mid term, they should look at cooperating better with Star partners for feeding.
They need to get load factors up and get people excited about booking them.


I thought I was the only one to notice this.. They are rather expensive compared to other options.. I've gotten cheaper flights with Cathay and Singapore than Thai which is ridiculous.. Thai needs to streamline it's operations. It's costs should be lower compared to the other big airlines in it's region but as previously stated it's a political head case.
 
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Mon Oct 07, 2019 8:02 pm

LAXintl wrote:
Like others mentioned much of the problem with the trio of SE Asian airlines GA-MH-TG centers on government hand in the operation.
The way things stand even the most efficient aircraft won't change the incompetence of management at these carriers nor structural problems like being bloated and patronage employment location for the government plus an unknown amount of corruption mixed in as well.

SQ, EK, EY, QR, CN3 are all government owned.
Efficiency has nothing to do with ownership, but with management, nevermind who. Admitedly, political interference can cause havoc like with AZ, but privatization has never been a panacea either : how many US companies have gone bust or under chapter 11 ? Same with split capital airlines like AF, JL, etc. Not to mention Hainan...
Only few examples of privately run airlines show impeccable record.

Other than TG's own induced woes, one has to bear in mind the competition that depresses yields, EK for one, but also all the LCCs that fly into DMK. As BKK is not a premium destination like SIN, HND or TPE, TG have little to position themselves other than service, which comes at a price. Thai Smile & Nok Air are partially owned by TG to keep market share & to prevent competitors from growing further.

The only solution I see in market conditions is that TG brand themselves up-market, impeccable service like they were renowned for, all while lowering their costs & streamlining their fleet, basically be run like QR.
BKK is better positionned than SIN to be a regional hub, they have everything to become a superconnector if they wanted to, which in turn would require major upfront investments, unlikely at this point.
 
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Tue Oct 08, 2019 12:30 am

TheEuphorian wrote:
Should have been privatized since 1997.

The only way to fix TG now is to turn it into a semi-LCC/tourist airline AND completely privatize it, sell all the 747/772A/77E/773, remove F ,introduce 10-ab Y in the 77W and Buy-on-Board for anything shorter than 3 hours and acquire narrowbodies.

And replace all the older planes with the A330neo. Does it sounds possible?
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DTVG
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Tue Oct 08, 2019 2:49 am

DWC wrote:
LAXintl wrote:
Like others mentioned much of the problem with the trio of SE Asian airlines GA-MH-TG centers on government hand in the operation.
The way things stand even the most efficient aircraft won't change the incompetence of management at these carriers nor structural problems like being bloated and patronage employment location for the government plus an unknown amount of corruption mixed in as well.

SQ, EK, EY, QR, CN3 are all government owned.
Efficiency has nothing to do with ownership, but with management, nevermind who. Admitedly, political interference can cause havoc like with AZ, but privatization has never been a panacea either : how many US companies have gone bust or under chapter 11 ? Same with split capital airlines like AF, JL, etc. Not to mention Hainan...
Only few examples of privately run airlines show impeccable record.


Some government owned airlines are run well, other not so much. You should also consider that some airlines (ME3) might only look shinny on the outside.
Accounting standards and audits aren't necessarily comparable internationally making profit/loss statements less convincing and transparent, financing can be preferential and/or opaque (ME3 and CN3) and the government can support its airlines indirectly, by financing huge airports while keeping fees artificially low, having lax labor laws, subsidising pilot training etc...
Its hard to quantify the true economic cost of these kind of things.
 
ewt340
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Tue Oct 08, 2019 3:21 am

SQ789 wrote:
TheEuphorian wrote:
Should have been privatized since 1997.

The only way to fix TG now is to turn it into a semi-LCC/tourist airline AND completely privatize it, sell all the 747/772A/77E/773, remove F ,introduce 10-ab Y in the 77W and Buy-on-Board for anything shorter than 3 hours and acquire narrowbodies.

And replace all the older planes with the A330neo. Does it sounds possible?


In case you didn't notice about their horrible management team. Everything is possible. But that made too much sense. So they wouldn't use that strategy.

Their strategy is to charge passengers with high ticket prices and then use lots of different plane and only operate small amount of them.
 
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MrBrightSide
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Tue Oct 08, 2019 3:22 am

There are many things wrong with TG, but it all starts with PaxEx i.e. customer experience. You can't hide inefficiencies in front of passengers, and their triangle flights are the very best example of how no matter which class you fly, experience is equally bad.

Let's take BKK-PEK route for example... when it comes to connecting Thailand and China, TG flies routes BKK - HKT (Phuket) - PEK (TG684) and back (TG685). If you're flying to Beijing, you're boarding on an domestic flight, getting a "C.I.Q" tag on your body, then moved through HKT airport (From arrival gate to the International level). And actually, it is not annoying as some other connecting flights - it's a nice break and you can always grab a stopover without penalties as well.

On return, your experience is the same, except when landing in BKK, the plane will go to international terminal, but ALL pax will be bussed to the domestic side of the terminal. And then pax will be split into international arrivals (luggage carousel 5) and domestic arrivals (luggage carousel 4). What's the problem there? Most of pax are Chinese, yet no one of ground staff speaks any of Chinese languages (PEK = Mandarin). Rince repeat for Hokkien, Cantonese, Shanghainese etc.

Their daily flight to Frankfurt (TG 925 / 926) is the same story - BKK-HKT-FRA, and back. This time, pax do understand English, the transit experience is ok, arrival experience at BKK is rince and repeat. Why park at a jetbridge gate, go through jetbridge and then onto the tarmac, be bussed to halfway around the airport, then turned around, go past the same plane and then onto the domestic arrivals?

Of course, they are forced to do this if you know the internal design of BKK airport, where you could be walking more than a mile or almost 2km to change gates.

Redesign the pax flow on BKK to increase efficiency, fuel for those buses isn't free, and increase number of intl' speaking arrival staff. It's not difficult. Just the bus part adds several hundred USD... per flight. Times 365...
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TG788
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Tue Oct 08, 2019 6:03 am

MrBrightSide wrote:
There are many things wrong with TG, but it all starts with PaxEx i.e. customer experience. You can't hide inefficiencies in front of passengers, and their triangle flights are the very best example of how no matter which class you fly, experience is equally bad.


There are 2 daily non-stop flights between Beijing and Bangkok in addition to the service via Phuket.

At present, services between Frankfurt and Bangkok are non-stop twice daily. Starting soon, one of the flights from Bangkok to Frankfurt will go via Phuket on 3 days a week, the other 4 days will be non-stop (the other non-stop flight remains). If a passenger doesn't want the rigmarole, it's quite avoidable.
 
DWC
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Tue Oct 08, 2019 12:20 pm

DTVG wrote:
Some government owned airlines are run well, other not so much. You should also consider that some airlines (ME3) might only look shinny on the outside.
Accounting standards and audits aren't necessarily comparable internationally making profit/loss statements less convincing and transparent, financing can be preferential and/or opaque (ME3 and CN3) and the government can support its airlines indirectly, by financing huge airports while keeping fees artificially low, having lax labor laws, subsidising pilot training etc...
Its hard to quantify the true economic cost of these kind of things.

Agreed. But audit companies are not immune to moral corruption : after all they want the contract extended the next years, so various window-dressing techniques are in place, common practice actually, but violating the principle of accounting transparency. In the worst cases, they do lie & sign their felony : Enron & Arthur Andersen went down just because of that, destroying billions in stock & thousands of jobs - pathetic. Anyone friends with colleagues in the accounting companies, the "sisters" as they are called can inform how that is done & tolerated up to a point.

The ME3, but all airlines in fact in various degrees & forms, externalize many things, including pollution to the environment & the UAE, Dubai specially, destroy their pristine coast line with wanton sky-scrapers, just like HKG, SYD, NYC, etc, point being it destroys human well-being as shown by various "unorthodox" economic, social or anthropological researches. While somewhat alien to narrow geek aviation, the direct cost of civil aviation to the environment & to human societies is dire. And it is not being reduced : none of the awsome engine improvements offsets the fact that traffic doubles every 15 years, efficiency does not match that rate, alas.

Airports create all kinds of pollution ( carbon, noise, light pollutions ), they are not a human friendly operation, that is why they are preferred far from town, but that is not the case of DXB, DOH or AUH. Keeping fees low is a decision matter, it makes the market contestable, which is healthy business : in the Telecom business, there are two models : either charge consumer a steep monthly fee with low call costs, or conversely low monthly fee with steep costs. Monthly mobile contracts have blurred the distinction, but intrinsically that is how telephone companies measure their costs & services. Also applicable to other economic activities : LHR is very expensive to land in, with the consequence of airlines privileging premium & LH flight : not saying it is wrong, but it is not contestable, so other airlines & FSCs short haul flights have to serve Gatwick or other - but London is a very special case because of unusually high trafic.
As long as the airports charge the same to foreign airlines, there is no discrimination & therefore are within WTO rules, which does not mean it is optimal globally. Stealing traffic relative to their O/D is a problem, the US3 are vocal about this but are the least concerned. The EU3 ( each are groups ) are directly concerned, so are Indian airlines & China's, none of which are vocal. In the case of China, they are slowly ramping up across Euroasia while also adding much capacity to the US, for their benefit first, but that also works against the ME3 as worlwide superconnectors.
 
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mercure1
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Mon Oct 14, 2019 8:53 pm

Thai management has been given 30-days to come up with a credible financial recovery plan.
The company also requested a loan of USD $1 billion for the 2020 fiscal year to cover investment and working capital needs.

https://www.asiatimes.com/2019/10/artic ... -lifeline/
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justloveplanes
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Mon Oct 14, 2019 11:32 pm

I have to think Thai is a goldmine for a properly managed private company. They can get the best slots and government facilitated tourist packages for a competitive edge. They need fleet rationalization.
 
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LAXintl
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Joined: Wed May 24, 2000 12:12 pm

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Tue Oct 22, 2019 10:33 pm

Now TG president acknowledges things don't look good and company at risk of closure


Thai Airways International president Sumeth Damrongchaitham said on Tuesday that staff must cooperate with the airline's rehabilitation efforts because it is in a crisis and faces possible closure.

"Today I want staff to be united to overcome the obstacles. Otherwise, the national airline must close down. There is still time for a solution, but there is not much time," Mr Sumeth said.

He said that THAI had lost its market leadership on several routes to competitors, citing northern routes that had generated a third of THAI's revenue but were now dominated by low-cost airlines.

"The competition is very fierce this year," Mr Sumeth said. "THAI is really in a crisis. Next year it must do its best. If staff are still unaware and do nothing, they will not have enough time to fight back. Today very little time remains. Today there is no comfort zone. Everyone will die if the vessel sinks," .


Thai Airways at risk of closure, president says
https://www.bangkokpost.com/business/17 ... ident-says

=


Related TG announced it would transfer 6 routes to TG Smile from BKK - Vientiane, Luang Prabang, Phnom Penh, Hanoi, Ho Chi Minh and Yangon.
From the desert to the sea, to all of Southern California
 
eamondzhang
Posts: 1671
Joined: Thu Sep 23, 2010 8:23 am

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Tue Oct 22, 2019 11:28 pm

Interesting to see TG is seeking to lease 3 777-200ERs - as if they don't have enough in their fleet.

Last time I flew TG to PNH (and that was two months ago during the school holiday season) I reckon the entire plan can be accommodated onto an A321 (it was opby A333). Now I know this is just one flight, but as the flight is also being trasnferred to Thai Smile it does indicate that the load generally isn't good. (Have to admit though that the flight I had was the single best flight I had out of some 20-odd flights I had over the past 10 years).

TG also has ridiculous pricings in many market - e.g. Australia and China, at least when you try to purchase directly. You're losing customers because you price yourself too high, which in turn brings in lower pax volume and less revenue, which snowballs onto your overall margin. It's a problem all around.

And never to mention TG's fleet which is always all over the place....

To put it simple, TG should really have been rid of all the 772, 77E, 773 and 744s, maybe A380s as well but if they can't find a buyer it might be worth keeping them around for high volume routes like Japan, and pick one of the 787 and A350 instead of having both. They should also really get more narrowbodies for regional flights and adding frequencies onto it. This alone will save them millions while making them more attractive.

Michael
 
usflyer msp
Posts: 3635
Joined: Tue May 23, 2000 11:50 am

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Wed Oct 23, 2019 1:37 am

TG should transfer their A330 fleet to Thai Smile and dense it up to something like a Norwegian/AC Rouge type configuration. Thai Smile should run everything in SE Asia/China/India except SIN, HKG, PVG, DEL, and BOM with the A330s and their existing 32X fleet.
 
TheEuphorian
Posts: 417
Joined: Tue Jan 03, 2017 9:35 am

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Wed Oct 23, 2019 1:43 am

There was a rumour floating around on the internet that TG plans to cease all flights to Laos, Cambodia, Vietnam and Myanmar, but TG denied it.
 
juliuswong
Posts: 2021
Joined: Wed Dec 14, 2016 3:22 am

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Wed Oct 23, 2019 2:20 am

As at 31 December 2018, they currently have 22,054 employees. With a fleet of just 84 aircraft (104 if you include Thai Smile), they are seriously bloated!
- Life is a journey, travel it well -
 
lawair
Posts: 239
Joined: Thu Jan 08, 2009 10:59 pm

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Wed Oct 23, 2019 5:25 pm

The numbers (based on 1H19) don't look critical. They're not great. I think the TG president used some poorly chosen language in an attempt to scare the labor unions into entertaining future concessions.

According to this newer article, the TG president says his words were misinterpreted and that there's no imminent risk of a shutdown. He also denied the reports that several ASEAN routes were being transferred to Thai Smile:

https://www.bangkokpost.com/business/17 ... -president
 
lalib
Posts: 107
Joined: Wed Feb 10, 2010 8:48 am

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Wed Oct 23, 2019 7:32 pm

Just being in the news is negative publicity for TG.
Yesterday I flew HKG to Khi had a choice between TG and EK, went for EK despite flight and connection being longer.
 
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LAXintl
Posts: 24405
Joined: Wed May 24, 2000 12:12 pm

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu Oct 24, 2019 3:05 am

Airline Weekly as their feature analysis this week looks at TG

Some story highlights:
o TG home market share is merely 16%. One of the lowest in world for a national carrier
o Facings intense competition from all sides - LCCs, Chinese and Indian carriers, ME3 and carriers of every stripe from around the world.
o Suffers from years of unhelpful political meddling including executive turnover
o Overstaffed and low productivity
o Overly complex fleet
o Currency management issues - only 6% of revenue USD, but 57% of cost
o Failed to devise a coordinated strategy between TG, TG Smile and its Nok Air investment
o Split Bangkok airport with domestic customer preference to use DMK
o Outmoded pricing and revenue management practices which has historically relied on bulk discounting and tour operators
o Positions itself as a premium carrier yet has a largely outdated product in a market which is primarily low-yield tourists and local VFR
o Many non-core assets and business ventures
o Experiencing traffic decline in 6 of airlines top 10 international markets

Top markets in seats
1. Japan
2. China
3. Hong Kong
4. India
5. South Korea
6. Singapore
7. Taiwan
8. Australia
9. Vietnam
10. Germany
From the desert to the sea, to all of Southern California
 
lawair
Posts: 239
Joined: Thu Jan 08, 2009 10:59 pm

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu Oct 24, 2019 10:51 am

LAXintl wrote:
Airline Weekly as their feature analysis this week looks at TG

Some story highlights:
o TG home market share is merely 16%. One of the lowest in world for a national carrier
. . .
o Positions itself as a premium carrier yet has a largely outdated product in a market which is primarily low-yield tourists and local VFR


There's more nuance to this point. There is substantial premium traffic into BKK but it is far outweighed by the amount of non premium traffic, especially in longer haul markets. The problem is, despite being the home carrier, TG hasn't really captured enough of the corporate travel at BKK. I read somewhere recently that TG would start to focus efforts on, among other things, developing corporate relationships. How have they not been doing this already?

The local Thai market that does fly premium for personal travel also doesn't really regard TG as being the best option product-wise. Many fly on other carriers or have only very loose loyalty to the home carrier. Those are all premium passengers that TG has done a poor job at wooing.
 
minilinde
Posts: 193
Joined: Sat Dec 31, 2005 1:16 am

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu Oct 24, 2019 11:26 am

lazyme wrote:
It did nothing to help TG that many 787's were grounded for a long time due to RR engine problems.
Flew a 747 to ARN a month ago,in low season.

They could easily have used a 787 to cover that flight .


The 747 flight was a one off, as some Thai royals flew to Stockholm, and they demand F. Only A380 and 747 have F. Normally TQ uses the 77W on ARN.
Types flown: A318, A319, A320, A321, A32N, A333, A343, A359, A380, AT42, AT72, B717, B733, B735, B736, B737, B738, B739, B744, B748, B763, B772, B773, B788, B789, CRJ2, CRJ9, ERJ190, MD80s/90, RJ100
 
MIflyer12
Posts: 7549
Joined: Mon Feb 18, 2013 11:58 pm

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu Oct 24, 2019 11:33 am

lawair wrote:
LAXintl wrote:
Airline Weekly as their feature analysis this week looks at TG

Some story highlights:
o TG home market share is merely 16%. One of the lowest in world for a national carrier
. . .
o Positions itself as a premium carrier yet has a largely outdated product in a market which is primarily low-yield tourists and local VFR


There's more nuance to this point. There is substantial premium traffic into BKK but it is far outweighed by the amount of non premium traffic, especially in longer haul markets. The problem is, despite being the home carrier, TG hasn't really captured enough of the corporate travel at BKK.


Is it lack of corporate traffic, or the mass of in-bound leisure traffic, that leaves Thai's share at 16%? Why wouldn't we expect international arriving travelers to fly on their home carriers? Is it really any different for AR, KQ, or SAA?
 
behramjee
Posts: 5052
Joined: Sat Aug 02, 2003 4:56 am

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu Oct 24, 2019 11:54 am

The media and Chairman of Thai is just playing "scare tactics" with the unions.

Thai Govt will never shut down TG because it plays an important role in bringing in forex $ + tourists into Thailand so if TG shuts down, it will have a major knock on side effect on the local economy. The core problem of TG like PK, AI, MH are "legacy issues" related to historical debt + fleet complexity which is related to "outside interference". TG has A380s, B744s, B777s, B787s, A350s, A330s and A320s operating i.e. 7 different aircraft families which is totally ridiculous in this day and age.

Last but not least, Thailand has open skies with everyone and this has been blatantly taken advantage of especially by the Gulf carriers who have taken a huge chunk of TG's EU/USA market share since 2005.
 
tso310
Posts: 6
Joined: Wed May 02, 2018 9:16 am

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu Oct 24, 2019 12:48 pm

LAXintl wrote:
Airline Weekly as their feature analysis this week looks at TG

Some story highlights:
o TG home market share is merely 16%. One of the lowest in world for a national carrier
o Facings intense competition from all sides - LCCs, Chinese and Indian carriers, ME3 and carriers of every stripe from around the world.
o Suffers from years of unhelpful political meddling including executive turnover
o Overstaffed and low productivity
o Overly complex fleet
o Currency management issues - only 6% of revenue USD, but 57% of cost
o Failed to devise a coordinated strategy between TG, TG Smile and its Nok Air investment
o Split Bangkok airport with domestic customer preference to use DMK
o Outmoded pricing and revenue management practices which has historically relied on bulk discounting and tour operators
o Positions itself as a premium carrier yet has a largely outdated product in a market which is primarily low-yield tourists and local VFR
o Many non-core assets and business ventures
o Experiencing traffic decline in 6 of airlines top 10 international markets

Top markets in seats
1. Japan
2. China
3. Hong Kong
4. India
5. South Korea
6. Singapore
7. Taiwan
8. Australia
9. Vietnam
10. Germany


As somebody who has been flying LHR - BKK since 1983 and now spends half the year in Thailand, married to a Thai for 35 years so I lnow the culture, everything that has been said is correct. There is one thing that has been missed its the number of free tickets to staff, yes Thai is about 40% over staffed com[pared to EVA and Singapore. Too many upgrades to business class for 'TV stars etc' who book economy and then harras check-in staff for an upgrade. The above could have been written 15 years ago. Nothing has changed since.
 
716131
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Joined: Thu Mar 16, 2017 11:51 am

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu Oct 24, 2019 1:03 pm

TheEuphorian wrote:
Should have been privatized since 1997.

The only way to fix TG now is to turn it into a semi-LCC/tourist airline AND completely privatize it, sell all the 747/772A/77E/773, remove F ,introduce 10-ab Y in the 77W and Buy-on-Board for anything shorter than 3 hours and acquire narrowbodies.

Or shut it down would be a great idea. If Thai got shut down, what will happen to Thai Aviation. I say this because some rumors reports that Thai will possibly shut down.
If it's not Boeing, I'm not going!
 
NZ321
Posts: 1208
Joined: Fri Jul 31, 2015 8:00 pm

Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu Oct 24, 2019 2:11 pm

I wouldn't totally reject the possibility of a shut down at either TG or MH but consider both to be unlikely for aforementioned reasons. The question is, given the bloated workforce and competition, who has the balls to come in and cut the mustard at TG? Significant reforms are needed, but I doubt that can be done without an outsider with a clear mandate (i.e. a proven international CEO and/or team, brought into to do just that - significant reform). Not holding my breath. In my humble opinion they can't see the wood for the trees at the moment. Lots of potential though. Just look at how NZ re-engineered itself. Low cost domestic and short haul. Seats to suit. Decent product long haul. Something along those lines.
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