Thai Airways staff question “when in loss, buy new planes” plan


Thai Airways’ plan to renew the fleet in the upcoming five years appears to be confusing for company’s staff. Union say employees are puzzled on how 38 new planes would help the airline to recover from $26.2 million net loss in the first three months of 2019 alone.

Thai Airways staff are puzzled about how investment to new planes would help the airline to recover from losses. “Staff were eager to know how the investment would improve the company’s balance sheet, for example on what routes the new planes would be flown […],” Bangkok Post reports

In May 2019, Thai Airways revealed suffering $26.2 million (828 million Baht) net loss in the first quarter of 2019. The result came in contrast to $121 million (3,8 billion Baht) profit the airline made in the first quarter of 2018. 

As the airline grapples with financial problems (with current plans to reach profitability again in mid-2020), Thai Airways is looking to add 38 new aircraft ‒ by purchase or lease ‒ to its fleet. The plan is to obtain 31 aircraft in 2020-2024, and add the remaining seven at a later date. The aircraft in question would be of both ‒ narrow body and wide body ‒ types. The aircraft acquisition plan, which could cost around $5 billion (156 billion Baht), was submitted for the government’s approval in May 2019, local media reported at the time.

Another airline from Thailand ‒ low cost carrier Nok air ‒ reported $12.6 million (391million baht) loss for the first quarter of 2019. Similarly to Thai Airways, Nok air is also looking to add an unspecified amount of new aircraft to its fleet ‒ a move of which Thai Airways management is strongly supportive of. Earlier in July 2019, Thai Airways announced “lending a strong support” for the budget carrier, in which the national carrier has a 21.80% stake. 

As of March 31, 2019, Thai Airways had a fleet of 103 aircraft, including 20 Airbus A320-200 under ThaiSmile’s brand. At the time, the company was also looking to sell 16 decommissioned aircraft. Currently, the airline flies 82 planes (Airbus A330s, A350XWBs, A380s, Boeing 747, 777 and 787 Dreamliner versions, average age 10 years), while Thai Smile operates 20 Airbus A320-200s (average age 5.6 years), according to data. The same source indicates that Nok Air has a fleet of 23. The average age of its Boeing 737s and De Havilland Canada DHC-8-400s is 5.4 years.

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