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

Wed May 20, 2020 2:43 pm

chonetsao wrote:
avier wrote:
The governments of countries like Thailand, Malaysia, Indonesia and alike need to realise they don't need state backed airlines.

The airline groups like Lion, AirAsia, SQ group, Jetstar, some strong Vietnam holdings(VietJet), etc can well serve all these markets and countries more efficiently and provide the required connectivity for tourism & business purposes.

Those airline groupings tend to have better cost structures as they achieve economies of scale due to a large presence in different countries by way of subsidiaries and multiple holdings.

So the need for such traditional, state backed, loss making national carriers becomes redundant.


The problem is those countries still need a national airline for long haul and rural destinations. All said airlines (except SQ, then SQ is a quasi-SOE) are good at short haul point to point, but very very bad at long haul. THAI already diversified its short haul and narrow body to Thai Smiles. It is trying.

In THAI's case, THAI is not only an airline, but also a business card representing the whole country's image and is a tourism promoter. It is a national asset. When many people think of Thailand, one of the first thing is the livery of THAI Airways and the beautiful hostess.

National owned airline is not the problem. The problem is the abuse of the appointed management and its corrupted stakeholders. The solution to save THAI is not to abandon the airline as a corpse and let LCC to take over. However, it requires a visionary leader to kill off the old THAI and start a new THAI in the same time. Rehabilitation won't work. Rebirth is required to save airlines like THAI.


Long-haul is the most risky part of aviation business- for airlines in developing countries.
It's a different scenario in the West or Middle East, where traffic flows and yeild makes the overall long haul network viable. In developing countries however, if yield ain't great for long haul, the bleed on the airline would be immense. So long-haul is best left to airlines who can make it work-like those major airline groupings in Asia I mentioned, ME3, or the western airlines. They'll be more than glad to fill up some of Thai Air's long haul network.

All these carriers- Thai Air, Malaysia Airlines, Garuda Indonesia, Air India- seem to suck when it comes to making long-haul work viably.

Their respective governments can instead use their financial resources for more pressing issues in their country than constantly fund their heavily-loss making national carriers for sake of national pride.
Like India constantly throwing good money after bad when it comes to Air India, when they have millions in poverty in the country and other pressing issues, just doesn't make any rational sense to keep the national carrier alive. Other airlines, private or foreign, will gladly fill up the vacated routes, and emotional sentiments for such flag carriers be damned.
 
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LAXintl
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Wed May 20, 2020 5:51 pm

Airbus has served notice of debts Thai owes on 30 leased aircraft, as the carrier struggles to formulate a plan for financial recovery.

https://thethaiger.com/hot-news/economy ... -its-debts
From the desert to the sea, to all of Southern California
 
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aemoreira1981
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Wed May 20, 2020 11:53 pm

LAXintl wrote:
Airbus has served notice of debts Thai owes on 30 leased aircraft, as the carrier struggles to formulate a plan for financial recovery.

https://thethaiger.com/hot-news/economy ... -its-debts


Looking at the fleet matrix, I suspect that Airbus might be considering a repossession of:

5 A320s (WE)
15 A333s (all of the A333s)
4 A359s
6 A388s

The other Airbus planes are leased from a variety of lessors.

Most in demand would likely be the A320s and A330s. The five A320s are the newest A320s in the WE fleet and could perhaps end up with PG. PG leases its turbofan fleet but owns all of its ATRs and also has 3 airports as assets of the airline.

The A330s as frames less than 10 years old with RR engines...should see demand...maybe with the Lufthansa Group as a cheaper replacement for old A343s and the B763s at LH and OS? Same for the A359s. I can see Airbus just writing off the value of the A388s, as they may not have much in the way of parts aside from the engines.
 
TonyClifton
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu May 21, 2020 12:04 am

aemoreira1981 wrote:
LAXintl wrote:
Airbus has served notice of debts Thai owes on 30 leased aircraft, as the carrier struggles to formulate a plan for financial recovery.

https://thethaiger.com/hot-news/economy ... -its-debts


Looking at the fleet matrix, I suspect that Airbus might be considering a repossession of:

5 A320s (WE)
15 A333s (all of the A333s)
4 A359s
6 A388s

The other Airbus planes are leased from a variety of lessors.

Most in demand would likely be the A320s and A330s. The five A320s are the newest A320s in the WE fleet and could perhaps end up with PG. PG leases its turbofan fleet but owns all of its ATRs and also has 3 airports as assets of the airline.

The A330s as frames less than 10 years old with RR engines...should see demand...maybe with the Lufthansa Group as a cheaper replacement for old A343s and the B763s at LH and OS? Same for the A359s. I can see Airbus just writing off the value of the A388s, as they may not have much in the way of parts aside from the engines.

Beer can market will be booming with all the 380s getting the chop chop I bet. In a different market those widebodies would be snapped up, but who is ready to grab them?
 
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aemoreira1981
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu May 21, 2020 12:13 am

A correction on the age---some of the A333s are 11 years old, but whoever gets them will likely be doing a heavy maintenance check anyway if not Airbus directly. The PW powered A333s at a lower MTOW have all been retired and scrapped, or will be scrapped...except for one that was converted to a freighter. Most were sold to Unical and flown to SBD for scrapping, while one was scrapped at BKK and one that was damaged beyond repair as a flying machine but has been moved off the airport to be a cafe.
 
ZK-NBT
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu May 21, 2020 2:12 am

fessor wrote:
ZK-NBT wrote:
chunhimlai wrote:

And get extra A220, A320 and A321lr for regional arm
Build HKT as 2nd hub with longhaul service
Fleet will be doubled from 125 to 250


Sounds like a disaster.

I'm perplexed by those saying phase out the 777/787 they are a single type rating for crew and the 787 and 77W fleet are at oldest 8 years, the 772ER is 13-14 years old and could stay for now, get rid of the 773A x6, 772A x6 and 744 x7. I'm pretty sure the A333/359 fleet are a single type rating as well. They may order some aircraft although even that seems not that likely to replace the older 777As and 744s but there is no point replacing new 77Ws and 787s. Future orders should imo be 359/789.


The 787s are One group of pilots and the 777 another.
The reason for drop the 787 is the fleet size.
Only the 772, 773 and 777-200ER should go.
The 77W should stay but should be made less premium. Maybe go to max 30 c class get premium economy class and 10 abreast economy.
The A380 should get smaller first and c class and add premium economy.
And then use A330 regional and A350 for long haul

And then A320 family for domestic

Shut down thai smile


Interesting you live and learn, I was under the impression TG had a single type rating for them. I agree reconfiguring the remaining aircraft, atleast all the same J seating and after this you would think a possible reduction in J seating aswell. I do agree with 10 abrest in the remaining 777s to.
 
lawair
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu May 21, 2020 11:09 am

avier wrote:
Long-haul is the most risky part of aviation business- for airlines in developing countries.
It's a different scenario in the West or Middle East, where traffic flows and yeild makes the overall long haul network viable. In developing countries however, if yield ain't great for long haul, the bleed on the airline would be immense. So long-haul is best left to airlines who can make it work-like those major airline groupings in Asia I mentioned, ME3, or the western airlines. They'll be more than glad to fill up some of Thai Air's long haul network.

All these carriers- Thai Air, Malaysia Airlines, Garuda Indonesia, Air India- seem to suck when it comes to making long-haul work viably.

Their respective governments can instead use their financial resources for more pressing issues in their country than constantly fund their heavily-loss making national carriers for sake of national pride.
Like India constantly throwing good money after bad when it comes to Air India, when they have millions in poverty in the country and other pressing issues, just doesn't make any rational sense to keep the national carrier alive. Other airlines, private or foreign, will gladly fill up the vacated routes, and emotional sentiments for such flag carriers be damned.


People here tend to group TG with these other carriers, and while there are similarities, it's easy to forget that TG was profitable every year until 2008 (the year of the BKK shutdown), with longhaul routes playing a noticeable role in that profitability. I believe even the US routes were profitable for a short period of time at least (although were mostly loss making in the end, particularly with the 2008 fuel spike, so were dropped).

(someone else created this and posted it to another forum site)
Image

Thailand has (well, had) a huge market longhaul, and quite a few longhaul markets from Thailand had noticeable high value traffic. When TG launched new routes, TG was fairly flexible in adjusting to routes that were successful and those that weren't (some routes stayed 3-4x weekly, and some went daily within a short period of time, like OSL and VIE). The problem for TG (and for everyone in the Europe-Thailand market) has been competition from more cost efficient state-owned carriers, the ME3. That competition has squeezed yields considerably, and when a route has become unprofitable, TG has cut the route (e.g. MAD, ATH, etc., or suspended DME). It's not all about "emotional sentiment" with these routes. (And if you think that TG flying these routes is based on emotion and not profit, then it would make more sense if you looked at other airlines and said the same thing when it comes to flying longhaul to Thailand. Is there a reason BKK is one of the first Asian cities that carriers like LX are returning to post pandemic?)

This whole pandemic situation actually highlights that everyone is in the same boat. The difference for TG is that Thai taxpayers have not had to pay for TG in the past to the level that US taxpayers do for their carriers. The Thai government has extended loans before, which TG had to repay, but there have not been subsidies or bankruptcies before now by TG in recent memory, as far as I know. The US government (as an example) has not only provided loans, but direct grants and subsidies (or investment) to US carriers, both during 9/11 and now. TG has definitely had its share of mismanagement and inefficiencies (due to laws affecting state enterprises), but some of that stuff actually exists with other non-state airlines as well.
 
avier
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu May 21, 2020 5:57 pm

lawair wrote:
People here tend to group TG with these other carriers, and while there are similarities, it's easy to forget that TG was profitable every year until 2008 (the year of the BKK shutdown), with longhaul routes playing a noticeable role in that profitability. I believe even the US routes were profitable for a short period of time at least (although were mostly loss making in the end, particularly with the 2008 fuel spike, so were dropped).
.
.
.
This whole pandemic situation actually highlights that everyone is in the same boat. The difference for TG is that Thai taxpayers have not had to pay for TG in the past to the level that US taxpayers do for their carriers. The Thai government has extended loans before, which TG had to repay, but there have not been subsidies or bankruptcies before now by TG in recent memory, as far as I know. The US government (as an example) has not only provided loans, but direct grants and subsidies (or investment) to US carriers, both during 9/11 and now. TG has definitely had its share of mismanagement and inefficiencies (due to laws affecting state enterprises), but some of that stuff actually exists with other non-state airlines as well.

The larger point was if these developing countries can afford to keep throwing money at their national carriers, well then good, they can continue to be kept alive. Otherwise, it's better to sell or shutdown. No point pouring money into a bottomless pit.

If TG had a healthy balance sheet during pre-covid times i.e the "good times", then it's reasonable to bail them out now. If not, there's no guarantee they'd ever be a viable company anytime soon and go the way of becoming like Malaysia Airlines or Garuda Indonesia i.e a constantly bleeding public-sector enterprise living off public funds.

Those American and European carriers that were/will be bailed out- like US3, Lufthansa & BA- have posted healthy profits in the past during pre-covid times and have proved themselves as viable businesses.
TG , on the other hand, has been been mostly loss making over the last decade even when other airlines posted healthy profits during good times.
So I'm not sure what makes them so different from MH & GA from a business perspective.
 
avier
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu May 21, 2020 7:17 pm

^This article clarifies my point of whether the (Thailand) government can afford to keep their national carrier alive or not, and the answer here is no. What happens in the bankruptcy process is left to be seen.
https://www.nst.com.my/world/region/202 ... ss-says-pm
 
lawair
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Thu May 21, 2020 10:48 pm

avier wrote:
The larger point was if these developing countries can afford to keep throwing money at their national carriers, well then good, they can continue to be kept alive. Otherwise, it's better to sell or shutdown. No point pouring money into a bottomless pit.

If TG had a healthy balance sheet during pre-covid times i.e the "good times", then it's reasonable to bail them out now. If not, there's no guarantee they'd ever be a viable company anytime soon and go the way of becoming like Malaysia Airlines or Garuda Indonesia i.e a constantly bleeding public-sector enterprise living off public funds.

Those American and European carriers that were/will be bailed out- like US3, Lufthansa & BA- have posted healthy profits in the past during pre-covid times and have proved themselves as viable businesses.
TG , on the other hand, has been been mostly loss making over the last decade even when other airlines posted healthy profits during good times.
So I'm not sure what makes them so different from MH & GA from a business perspective.


I think we're speaking past each other on different topics, and that may be my fault if I didn't directly address what you were focusing on. I agree on TG's mismanagement and the need to drastically restructure, but the government is not looking to shut down or sell. When compared to the other carriers you mention, TG actually had a decent balance sheet during pre-COVID times and never needed subsidies. It was operationally profitable during many years, but losses were created from accounting for the depreciation of aircraft that they were no longer operating and couldn't sell (the result of bad or potentially corrupt purchase decisions), or drastic fluctuations in exchange rates. This did not affect the carrier's cash position. Both the current ratios and cash levels were generally stable and in decent shape, even with the net losses, and the government had no need to inject any funding. TG never had to go through the bankruptcies that US carriers did, and actually made money during times that US carriers were losing money (see, e.g., 2005, 2006, 2007, 2009 and 2010). US carriers then were where TG probably is now. A string of annual losses, and a need to restructure. I'm not sure if we were calling for US carriers to fold back then, although the government did not block mergers with other US carriers at the time. In 2012, two of the US3 lost money, while TG actually had a net profit.

So the Thai government is basically allowing for a Chapter 11-style reorganization, with the potential to relinquish majority control of the carrier (although based on what I'm reading, the government may indirectly still own a majority of the company). TG will be leaner (as it needs to be), but, (and this goes to what I thought we were talking about earlier), the revived TG will likely fly longhaul from BKK. The markets are too important for Thailand and there is a fair amount of corporate traffic between BKK to those nonstop points. Perhaps it won't be all of the points currently served, but TG definitely would not have flown 12-14 European cities from Bangkok in the recent past and been operationally profitable if the market wasn't there. TG had more robust services to Europe than most other Asian carriers, with higher than daily service to, at times, 5 European cities.

All that being said, I agree with a lot of what people are saying here. We've known that TG has had a bloated cost structure and an overdiversified fleet. I think that will be drastically changed with this bankruptcy reorganization. There will be a significant cut in headcount, the company will probably not be considered a "state enterprise," and some of the red tape and employee costs (they're currently all public sector employees and belong to a public sector union) will go away. There needs to also be product rationalization and a restoration of confidence by the Thai market, which itself had lost support for TG since before 2008. (My thinking is that the ME3 came onto the scene with a higher quality product and cheaper costs, and TG started to cut service quality to the point that Thai citizens started being turned off and started flying other carriers.)

In conclusion, I agree with you -- they shouldn't get a bail out. But that's not to say they will be shut down or sold. It's basically Chapter 11 reorganization, and it's sorely needed (and follows the path of US carriers).
.
 
changyou
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri May 22, 2020 2:01 am

https://www.thestar.com.my/aseanplus/as ... e-laid-off
Thai gonna make some redundancy exercise.
 
filipinoavgeek
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri May 22, 2020 2:11 am

Surprised that people don't usually mention PR when people talk about the "struggling ASEAN airlines" that struggle in long-haul like MH/GA/TH despite also having years of profitability. I understand it's probably because it's smaller, but it still has a fairly sizable fleet. Is the fact that PR is fully privatized unlike the others a factor?
 
TheEuphorian
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Re: Minister: THAI "Financial Status Critical"; Rehab Program Failing

Fri May 22, 2020 12:00 pm

Thailand's government has officially reduced its stake in TG down to 48% from 51%, effectively ending TG's status as a state enterprise.
Source(in Thai):
https://www.thansettakij.com/content/43 ... ISjmoBK_Ko
Also, there are unverified reports that TG will also retire its entire leased 787-8 and 787-9 subfleets as part of its reorganization.
 
Ishrion
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Rumor: Thai Airways Retiring All 787s?

Tue May 26, 2020 5:53 pm

In the past few days, there’s been rumors that Thai Airways will remove all Boeing 787 Dreamliners from its fleet as the airline restructures in bankruptcy court.

Thai currently has 6 787-8s and 2 787-9s, all of which are leased from ILFC/AerCap.

Here’s one of the posts regarding the rumor: https://twitter.com/bombkung1998/status ... 7158542336

While all 8 787s have been grounded, some of Thai’s A350s and 777-300ERs continue to fly, presumably for cargo flights.

Would this decision make sense since restructuring could lead them to terminate the 787’s leases early? Has anyone else heard more on this?

Edit: Ouch, thread got moved here
Last edited by Ishrion on Tue May 26, 2020 6:21 pm, edited 1 time in total.
 
GLANKG
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Re: Rumor: Thai Airways Retiring All 787s?

Tue May 26, 2020 5:58 pm

Covid-19 is indeed unprecedented, even TG is to simplify fleet at last.
 
Antarius
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Re: Rumor: Thai Airways Retiring All 787s?

Tue May 26, 2020 5:59 pm

Would this decision make sense


Nothing relating to TG's fleet and fleet plans make sense ever. Who knows what they will do.
2020: SFO DFW IAH HOU CLT MEX BIS MIA GUA ORD DTW LGA BOS LHR DUB BFS BHD STN OAK PHL ISP JFK SJC DEN SJU LAS TXL GDL
 
PANAMsterdam
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Re: Rumor: Thai Airways Retiring All 787s?

Tue May 26, 2020 6:23 pm

Antarius wrote:
Would this decision make sense


Nothing relating to TG's fleet and fleet plans make sense ever. Who knows what they will do.


Order more A380's :biggrin:
Every country has an airline. The world has Pan Am.
 
Ishrion
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Re: Updated: Thai Airways enters Bankruptcy

Tue May 26, 2020 6:24 pm

Holdup, what’s with the new thread title? Thai Airways didn’t actually enter bankruptcy? They’re simply restructuring.
 
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LAXintl
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Re: Updated: Thai Airways enters Bankruptcy

Tue May 26, 2020 6:34 pm

Ishrion wrote:
Holdup, what’s with the new thread title? Thai Airways didn’t actually enter bankruptcy? They’re simply restructuring.


Sure it has.

Thai Airways submits bankruptcy request, court says
https://in.reuters.com/article/thai-air ... NKBN2321P3

"The Central Bankruptcy Court has accepted for consideration Thai Airways International Plc's filing."
https://www.bangkokpost.com/business/19 ... bankruptcy

"Thai Airways announced Tuesday that the government has approved its proposal for a sweeping restructuring plan to be overseen by the country's Central Bankruptcy Court."
https://www.cnn.com/2020/05/19/business ... index.html
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Ishrion
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Re: Updated: Thai Airways enters Bankruptcy

Tue May 26, 2020 6:41 pm

LAXintl wrote:
Ishrion wrote:
Holdup, what’s with the new thread title? Thai Airways didn’t actually enter bankruptcy? They’re simply restructuring.


Sure it has.

Thai Airways submits bankruptcy request, court says
https://in.reuters.com/article/thai-air ... NKBN2321P3

"The Central Bankruptcy Court has accepted for consideration Thai Airways International Plc's filing."
https://www.bangkokpost.com/business/19 ... bankruptcy

"Thai Airways announced Tuesday that the government has approved its proposal for a sweeping restructuring plan to be overseen by the country's Central Bankruptcy Court."
https://www.cnn.com/2020/05/19/business ... index.html


Oh damn, thanks. Didn't see that new one.
 
Vicenza
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Re: Updated: Thai Airways enters Bankruptcy

Tue May 26, 2020 6:57 pm

LAXintl wrote:
Ishrion wrote:
Holdup, what’s with the new thread title? Thai Airways didn’t actually enter bankruptcy? They’re simply restructuring.


Sure it has.

Thai Airways submits bankruptcy request, court says
https://in.reuters.com/article/thai-air ... NKBN2321P3

"The Central Bankruptcy Court has accepted for consideration Thai Airways International Plc's filing."
https://www.bangkokpost.com/business/19 ... bankruptcy

"Thai Airways announced Tuesday that the government has approved its proposal for a sweeping restructuring plan to be overseen by the country's Central Bankruptcy Court."
https://www.cnn.com/2020/05/19/business ... index.html


So what's different than when a US airline enters Chapter 11.......that's not 'bankruptcy' either
 
Antarius
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Re: Rumor: Thai Airways Retiring All 787s?

Tue May 26, 2020 7:53 pm

PANAMsterdam wrote:
Antarius wrote:
Would this decision make sense


Nothing relating to TG's fleet and fleet plans make sense ever. Who knows what they will do.


Order more A380's :biggrin:


But they already have them. More likely, to truly diversify, they need some a330neos; 4 a339 and 2 a338. Also a a332 and a 78J for good measure.
2020: SFO DFW IAH HOU CLT MEX BIS MIA GUA ORD DTW LGA BOS LHR DUB BFS BHD STN OAK PHL ISP JFK SJC DEN SJU LAS TXL GDL
 
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PA110
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Re: Updated: Thai Airways enters Bankruptcy

Tue May 26, 2020 8:31 pm

TG has always been the dumping ground for underachieving offspring of high-ranking military generals.
Look, it's been swell, but the swelling's gone down.
 
CRJ 900
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Re: Updated: Thai Airways enters Bankruptcy

Tue May 26, 2020 9:39 pm

Really sorry to hear this but it was inevitable .... They should just build a fleet around 787s and A321neos and get rid of the rest. Simplify and be a smaller more efficient airline. The Thai govt shud start cracking down on the amount of access and 5th freedom offered to foreign carriers. Also, exactly how many low cost airlines do they need? Thai Lion, Nok, Air Asia, and then there's Bangkok Airways. How many of those companies were actually making money prior to Covid?
 
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LAXintl
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Re: Updated: Thai Airways enters Bankruptcy

Tue May 26, 2020 9:59 pm

CRJ 900 wrote:
. The Thai govt shud start cracking down on the amount of access and 5th freedom offered to foreign carriers.


Tourism is one of the most important industries in Thailand and a key contributor to GDP and employment. To support the sector and attract visitors, Thailand has long encouraged liberal air service agreements.

Yes its a bit of a paradox, but having many foreign airlines serving Thailand and bringing in trillions in annual related income is a bigger priority than trying to shelter TG from the competition.

CRJ 900 wrote:
Also, exactly how many low cost airlines do they need? Thai Lion, Nok, Air Asia, and then there's Bangkok Airways. How many of those companies were actually making money prior to Covid?


Thailand is a busy market, so its not like airplanes are flying empty. Also under ASEAN agreement companies like Lion Air and Air Asia are allowed to set up subsidiaries in Thailand.

For specifics - Both Bangkok Airways and Air Asia have posted profits while Thai Lion showed loss from what I see.
From the desert to the sea, to all of Southern California
 
lawair
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Re: Updated: Thai Airways enters Bankruptcy

Tue May 26, 2020 10:49 pm

A bunch of corporate execs were added to the TG board for the bankruptcy restructuring. One of which is Piyasvasti Amranand, who was CEO the last time TG was generally profitable (and really was shaping up the company in good ways before he was removed when a new government came into power). I would love to see him as CEO again though but I guess he may have some valuable input as a board member.
Last edited by lawair on Tue May 26, 2020 10:50 pm, edited 1 time in total.
 
moa999
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Re: Updated: Thai Airways enters Bankruptcy

Tue May 26, 2020 10:50 pm

Will be interesting how all these affiliates survive.given the lack of a single aviation market they normally have a local equity partner who notionally owns 50/51%, but most are pretty heavily geared.

Guess it will depend on whether any local bailout money, and the exact structure of any guarantees over leases or loans
 
F9Animal
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Re: Updated: Thai Airways enters Bankruptcy

Wed May 27, 2020 7:14 am

Is corruption perhaps a problem with the airline? People skimming money or was it dysfunctional management? Seems like a competent leadership team could have this airline swimming in profits, pre Covid-19 of course. What was the tipping point?
I Am A Different Animal!!
 
mxaxai
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Re: Updated: Thai Airways enters Bankruptcy

Wed May 27, 2020 9:31 am

Vicenza wrote:
So what's different than when a US airline enters Chapter 11.......that's not 'bankruptcy' either

Yes it is...
Bankruptcy doesn't mean "liquidate all assets", it just means that the company can no longer pay all the bills (and, by filing bankruptcy, is no longer obliged to pay them like a regular business would). The creditors can decide on whatever measure that causes them the lowest losses.
F9Animal wrote:
Is corruption perhaps a problem with the airline? People skimming money or was it dysfunctional management? Seems like a competent leadership team could have this airline swimming in profits, pre Covid-19 of course. What was the tipping point?

I don't think it's corruption per se, but there is significant government influence in the aircraft choice, the routes and the staffing. TG's fleet is an absolute mess (or a beautiful arrangement from a photographer's POV) because they're expected to buy the latest and greatest from Boeing and Airbus to keep both happy. Their routes have to cover very high yielding business traffic to BKK, and very low yielding tourism to Thailand's beaches. Problem is, their premium product is at best similar to foreign legacies, and their economy product is not cheap enough to compete with LCC's. They don't have a real unique selling point to make me choose TG over SQ or EK in a premium class, or TG over Air Asia or Scoot in economy.
 
hohd
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Re: Updated: Thai Airways enters Bankruptcy

Wed May 27, 2020 7:17 pm

Just like South African, Thailand gave liberal access to ME2 (not sure Etihad is much of a competitor now) where O & D is minimal and as a result suffered immensely. Giving liberal access to budget carriers in China, SE Asia is different because of strong O & D. They need balance out - access vs encouraging tourism. And Thai Airways will continue to survive in some manner, so this is just restructuring, similar to US Style Chapter 11.
 
intaJET
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Re: Updated: Thai Airways enters Bankruptcy

Wed May 27, 2020 10:14 pm

mxaxai wrote:
Vicenza wrote:
Problem is, their premium product is at best similar to foreign legacies, and their economy product is not cheap enough to compete with LCC's. They don't have a real unique selling point to make me choose TG over SQ or EK in a premium class, or TG over Air Asia or Scoot in economy.


Greetings everyone,

Personally, I have to respectfully disagree on this point. TG have proven to be an outstanding service provider, well in-keeping with traditional Thai culture & hospitality. I certainly hope they weather this difficult situation (virtually all carriers face horrendous decisions right now to survive).

Take care, be safe & look forward to better days.
intaJET
 
MIflyer12
Posts: 7776
Joined: Mon Feb 18, 2013 11:58 pm

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

Wed May 27, 2020 10:20 pm

lawair wrote:
The problem for TG (and for everyone in the Europe-Thailand market) has been competition from more cost efficient state-owned carriers, the ME3.


Thanks for the thoughtful post and graphic. Why hasn't Thai - over more than a decade - been able to become cost-competitive with the ME3?
 
filipinoavgeek
Posts: 343
Joined: Mon Mar 04, 2019 1:18 am

Re: Updated: Thai Airways enters Bankruptcy

Wed May 27, 2020 10:23 pm

Seeing all these quotes about how Southeast Asian countries "don't need flag carriers" or "should only have LCCs" greatly saddens me and makes me wonder if people here are even familiar with the countries they're talking about. There's always talk about how these markets are "low-yielding" and have "little-to-no business traffic outside Singapore", while being ignorant of the fact that SEA is one of the world's fastest growing markets and is home to almost 10% of the global population. While tourism and VFR are undeniably a major part of SEA airline markets, there's also significant business traffic, especially to places like Japan, China, Korea and the US which all have close economies ties with the region. The FSCs are struggling, yes, and the LCCs are a major part of that, but there is demand for premium traffic and there's room for local FSC carriers to meet that demand.

CRJ 900 wrote:
Really sorry to hear this but it was inevitable .... They should just build a fleet around 787s and A321neos and get rid of the rest. Simplify and be a smaller more efficient airline. The Thai govt shud start cracking down on the amount of access and 5th freedom offered to foreign carriers. Also, exactly how many low cost airlines do they need? Thai Lion, Nok, Air Asia, and then there's Bangkok Airways. How many of those companies were actually making money prior to Covid?


Bangkok Airways is actually more of a FSC (or as they refer to themselves, "botique") than an LCC. They compete more directly with TG more than they do with the LCCs.
 
intaJET
Posts: 42
Joined: Tue Apr 17, 2018 3:22 pm

Re: Updated: Thai Airways enters Bankruptcy

Wed May 27, 2020 11:29 pm

[/quote]
Bangkok Airways is actually more of a FSC (or as they refer to themselves, "botique") than an LCC. They compete more directly with TG more than they do with the LCCs.[/quote]

I totally agree. Bangkok Airways, is without doubt, deserving of the stellar reputation for service that they have. Highly recommended. A credit to Thailand and the aviation (service) industry as a whole. They truly reflect the Thai approach to service level, just as TG do. Always remember, you can't please everyone, all of the time, and people are always quick to criticize, but slow to praise.

Be safe these difficult times.
IntaJET
 
lawair
Posts: 239
Joined: Thu Jan 08, 2009 10:59 pm

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

Wed May 27, 2020 11:46 pm

MIflyer12 wrote:
lawair wrote:
The problem for TG (and for everyone in the Europe-Thailand market) has been competition from more cost efficient state-owned carriers, the ME3.


Thanks for the thoughtful post and graphic. Why hasn't Thai - over more than a decade - been able to become cost-competitive with the ME3?


I'm just guessing, but part of it was probably structural--state enterprise status meant that labor might've come with higher costs, greater union protections, etc. Crew and other employees often stayed with the carrier into their 50s and 60s and built up seniority either as crew or at corporate. That compares to the two 5-year contracts that other carriers were using with crew that kept costs down. I also saw somewhere that TG had higher employee numbers (per passenger or per unit of revenue, I don't recall what the rate was measuring) than many of its peers.

The other side is more discussed here--poor decision making or government interference. As a state enterprise, there were bureaucratic hurdles to getting things done like acquiring aircraft, and revolving management from changes in the Thai government created instability in policy and delays in plan implementation. All resulted in higher costs. Aircraft and engine purchases were over diversified and led to inconsistent product and an inability to control costs.

The ME3 also benefited from shorter stage lengths than TG in the Europe-Thailand market, with a product that they were able to sell more cheaply and that was seen as more consistent than TG. Then there's also a belief by some that the ME3 benefit from favorable terms in their home countries that leads to lower costs on expenses like fuel.

I think TG started losing favor among many Thai people when some of these new products entered the market (with other carriers improving their product while TG was blocked from having a consistent long-term strategy), and it hurt that TG started to be a political issue (with the PM during the early 2000s saying the airline "sucked" while promoting another carrier he and his family, future party leaders, supposedly had connections to). I don't know the latter issue well enough to know what's fact, but suffice it to say it's not worth discussing here.

That said, TG has had plenty of competition on Europe and regional routes, including 5th freedom competition, for decades, so it's been pretty remarkable how they stayed profitable for so long given the structural issues.
 
TheEuphorian
Posts: 421
Joined: Tue Jan 03, 2017 9:35 am

Re: Updated: Thai Airways enters Bankruptcy

Thu May 28, 2020 10:07 am

Adding to the fact on why TG is suffering from LCC competition, is that its main LCC competitor, Thai Airasia, is linked to a political party in Thailand, which granted them a political and business advantage, which TG does not have, thus resulting in TG being superseded in every aspect by Airasia.
 
tphuang
Posts: 5067
Joined: Tue Mar 14, 2017 2:04 pm

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

Thu May 28, 2020 12:02 pm

MIflyer12 wrote:
lawair wrote:
The problem for TG (and for everyone in the Europe-Thailand market) has been competition from more cost efficient state-owned carriers, the ME3.


Thanks for the thoughtful post and graphic. Why hasn't Thai - over more than a decade - been able to become cost-competitive with the ME3?


It seems like they have a really terrible business model with too many widebody types. They put their entire operation at BKK. They don't even operate a domestic network that doesn't even BKK.

I end up having to fly AirAsia or Bangkok airways when I'm going between tourist destinations in Thailand. LCCs and regional carriers just killed them.

intaJET wrote:
I totally agree. Bangkok Airways, is without doubt, deserving of the stellar reputation for service that they have. Highly recommended. A credit to Thailand and the aviation (service) industry as a whole. They truly reflect the Thai approach to service level, just as TG do. Always remember, you can't please everyone, all of the time, and people are always quick to criticize, but slow to praise.

Be safe these difficult times.
IntaJET

Yes, bangkok airways is really great. They are definitely a full service carrier, more so than most legacy carriers around the world.
 
VRHNM
Posts: 119
Joined: Mon Mar 13, 2017 2:02 pm

Re: Updated: Thai Airways enters Bankruptcy

Thu May 28, 2020 1:12 pm

Just the issue of business class hard products alone is a big mess that the TG administration will have to tackle... To my knowledge there are currently 6-7(?) differing types of business hard products operating with TG.

"Older" Seats
2-2-2 (2 types of A333, 772/E)
2-3-2 (773) - Seems to be basically the same as the 2-2-2 but with an extra seat in the middle

"Newer" Seats
Staggered 1-2-1 (B77W, A388, A359) - A359 variant has a different finish compared to the 77W and A388 versions.
Staggered w/ throne seats (1 type of A333)
Reverse Herringbone (789)
BE Diamond (788)

The fact that they operate two different types of J class on the 787 variants just... Leaves me speechless.
 
User avatar
LAXintl
Posts: 24515
Joined: Wed May 24, 2000 12:12 pm

Re: Updated: Thai Airways enters Bankruptcy

Fri May 29, 2020 6:30 pm

Per Amedeo

Thai Airways International has not paid any lease payments on its four aircraft. Amedeo is awaiting further news of the airline planners’ intentions, which might not become clear until much nearer to the August 2020 hearing.

I believe the 4 aircraft referenced are 4 A350s.

The August hearing mentioned is the August 17 court date where creditors will have their first opportunity to learn about the companies intentions.
From the desert to the sea, to all of Southern California
 
TC957
Posts: 3785
Joined: Wed May 23, 2012 1:12 pm

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

Fri May 29, 2020 7:36 pm

tphuang wrote:
MIflyer12 wrote:
lawair wrote:
The problem for TG (and for everyone in the Europe-Thailand market) has been competition from more cost efficient state-owned carriers, the ME3.


Thanks for the thoughtful post and graphic. Why hasn't Thai - over more than a decade - been able to become cost-competitive with the ME3?


It seems like they have a really terrible business model with too many widebody types. They put their entire operation at BKK. They don't even operate a domestic network that doesn't even BKK.

They operate - or did anyway - a CNX - HKT flight.
 
User avatar
SQ22
Moderator
Posts: 1856
Joined: Sat Feb 25, 2012 9:29 am

Re: Updated: Thai Airways enters Bankruptcy

Sun May 31, 2020 8:13 am

Just to be clear, Thai entered bankruptcy protection. Title was misleading and will be updated accordingly.

UPDATE 1-Thai Airways, under bankruptcy protection, appoints chair, ex-CEO to rehab body
 
eamondzhang
Posts: 1729
Joined: Thu Sep 23, 2010 8:23 am

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

Sun May 31, 2020 9:58 am

changyou wrote:
https://www.thestar.com.my/aseanplus/aseanplus-news/2020/05/21/nearly-6000-thai-airways-staff-to-be-laid-off
Thai gonna make some redundancy exercise.

That finally happened

I read here and elsewhere that TG is significantly overstaffed

Now it's a good time to cut it down to what an efficient airline should have

Michael
 
User avatar
christao17
Posts: 927
Joined: Sun Apr 17, 2005 12:14 pm

Re: Updated: Thai Airways enters Bankruptcy Protection

Sun May 31, 2020 10:05 am

Having lived here in BKK for the past nearly 15 years, it has been interesting to watch the ongoing saga of TG. If they could get their costs (especially staff and benefits) under control and streamline their fleet ("we'll have six of these aircraft and six of those and six of whatever else you have..."), they could emerge from bankruptcy as a competitive carrier. Being part of Star Alliance is a big plus and, despite some inconsistencies, the service is usually pretty decent.
More than a dozen years flying in and around Asia...
 
Ishrion
Posts: 2678
Joined: Mon Feb 04, 2019 6:17 am

Re: Updated: Thai Airways enters Bankruptcy Protection

Fri Jun 05, 2020 4:47 am

Thai Airways only has one scheduled 787 route left - Bangkok to Auckland. Is it possible they haven't updated this route yet?

The rest are on the 777s. Is it safe to say Thai Airways is truly getting rid of its 787s?

https://www.routesonline.com/news/38/ai ... t-04jun20/
 
TheEuphorian
Posts: 421
Joined: Tue Jan 03, 2017 9:35 am

Re: Updated: Thai Airways enters Bankruptcy Protection

Fri Jun 05, 2020 5:26 am

Ishrion wrote:
Thai Airways only has one scheduled 787 route left - Bangkok to Auckland. Is it possible they haven't updated this route yet?

The rest are on the 777s. Is it safe to say Thai Airways is truly getting rid of its 787s?

https://www.routesonline.com/news/38/ai ... t-04jun20/

Entirely possible that AKL will be downgraded to a 777-200ER service after the 787 fleet retires.
 
Ishrion
Posts: 2678
Joined: Mon Feb 04, 2019 6:17 am

Re: Updated: Thai Airways enters Bankruptcy Protection

Fri Jun 05, 2020 5:37 am

Ishrion wrote:
Thai Airways only has one scheduled 787 route left - Bangkok to Auckland. Is it possible they haven't updated this route yet?

The rest are on the 777s. Is it safe to say Thai Airways is truly getting rid of its 787s?

https://www.routesonline.com/news/38/ai ... t-04jun20/


Forgot to finish typing. The rest are on 777s, A330s, and A350s*.
 
ZK-NBT
Posts: 7466
Joined: Mon Oct 16, 2000 5:42 pm

Re: Updated: Thai Airways enters Bankruptcy Protection

Fri Jun 05, 2020 5:55 am

Ishrion wrote:
Ishrion wrote:
Thai Airways only has one scheduled 787 route left - Bangkok to Auckland. Is it possible they haven't updated this route yet?

The rest are on the 777s. Is it safe to say Thai Airways is truly getting rid of its 787s?

https://www.routesonline.com/news/38/ai ... t-04jun20/


Forgot to finish typing. The rest are on 777s, A330s, and A350s*.


And A380 which seems optimistic but FRA is usually 2 daily A380 77W so a single A380 might be ok.

As for AKL and the 789s those have helped turn the route to daily year round since they started in 2017, no idea if it’s profitable, though it hardly makes sense to have 2 planes for 1 long haul route. They had A359s loaded at one stage a year or 2 back and have used 77E and 77W at times, the 77E has old cabins still. Maybe it’s more a case of just using the A333s regionally with A359s and 777s? Hardly makes sense though to bring back the 2 789s.
 
TheEuphorian
Posts: 421
Joined: Tue Jan 03, 2017 9:35 am

Re: Updated: Thai Airways enters Bankruptcy Protection

Fri Jun 05, 2020 7:59 am

TG's frequent flyer program, Royal Orchid Plus, is now not allowing people to do mileage redemptions on TG flights.
Source(in Thai):
https://www.thansettakij.com/content/business/437209?
 
NZ321
Posts: 1213
Joined: Fri Jul 31, 2015 8:00 pm

Re: Updated: Thai Airways enters Bankruptcy Protection

Fri Jun 05, 2020 9:11 am

ZK-NBT wrote:
Ishrion wrote:
Ishrion wrote:
Thai Airways only has one scheduled 787 route left - Bangkok to Auckland. Is it possible they haven't updated this route yet?

The rest are on the 777s. Is it safe to say Thai Airways is truly getting rid of its 787s?

https://www.routesonline.com/news/38/ai ... t-04jun20/


Forgot to finish typing. The rest are on 777s, A330s, and A350s*.


And A380 which seems optimistic but FRA is usually 2 daily A380 77W so a single A380 might be ok.

As for AKL and the 789s those have helped turn the route to daily year round since they started in 2017, no idea if it’s profitable, though it hardly makes sense to have 2 planes for 1 long haul route. They had A359s loaded at one stage a year or 2 back and have used 77E and 77W at times, the 77E has old cabins still. Maybe it’s more a case of just using the A333s regionally with A359s and 777s? Hardly makes sense though to bring back the 2 789s.


789 is surely history. And as for AKL I wouldn't hold your breath that it will remain on the network. We will have to wait and see on that one. I have flown TG A359 and B777s a number of times and reckon there's no point in TG trying to make AKL work with the B772 and if they are retiring / returning lots of units they may not be able to justify staying in the AKL market.
Plane mad!
 
ZK-NBT
Posts: 7466
Joined: Mon Oct 16, 2000 5:42 pm

Re: Updated: Thai Airways enters Bankruptcy Protection

Fri Jun 05, 2020 9:25 am

NZ321 wrote:
ZK-NBT wrote:
Ishrion wrote:

Forgot to finish typing. The rest are on 777s, A330s, and A350s*.


And A380 which seems optimistic but FRA is usually 2 daily A380 77W so a single A380 might be ok.

As for AKL and the 789s those have helped turn the route to daily year round since they started in 2017, no idea if it’s profitable, though it hardly makes sense to have 2 planes for 1 long haul route. They had A359s loaded at one stage a year or 2 back and have used 77E and 77W at times, the 77E has old cabins still. Maybe it’s more a case of just using the A333s regionally with A359s and 777s? Hardly makes sense though to bring back the 2 789s.


789 is surely history. And as for AKL I wouldn't hold your breath that it will remain on the network. We will have to wait and see on that one. I have flown TG A359 and B777s a number of times and reckon there's no point in TG trying to make AKL work with the B772 and if they are retiring / returning lots of units they may not be able to justify staying in the AKL market.


I would say it’s only surely history if the 788s are aswell, these current schedules don’t tell us a great deal in some ways, there are still 773As scheduled when now would surely be a good time to remove them completely.

I reckon TG will keep AKL somehow if not non stop, via Australia again maybe. Not saying it’s right as stops add costs but also helps them keep a presence.

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