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Thai Airways A350

Big day at BKK as Thai receives first A350 and signals positive changes for future

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After several years of struggle, things finally seem to be looking up at Thai Airways.

As the home carrier of The Land of Smiles, they have historically been a major player in the Asian airline market, further cemented by the fact that they are one of the founding members of Star Alliance, joining up with United, Lufthansa, SAS and Air Canada way back in 1996 – but the airline has faced tremendous challenges in the past few years with political turmoil in Thailand disrupting tourist arrivals and government mismanagement of the airline’s assets.

They seem to be turning the corner however, with a new fleet of shiny A350s arriving into Bangkok today and a fleet revitalization plan now being enacted after series of positive financial results. TG last aircraft order was made five years ago in 2011, but are now drawing up fleet order plans that will take Thailand’s national carrier’s fleet plans through 2027.

Thai Airways is now at a much stronger position to compete regionally, says said Narongsak Plodmechai, Bangkok-based chief investment officer at SCB Asset Management Co who manage much of TG;’s debt. He recently told the Bangkok Post that:

“Since the implementation of the restructuring program, costs have come down significantly, while fares are much more competitive.”

Charamporn’s cost cuts and a decline in oil prices helped Thai Airways return to profit in the first half and have fueled a 191% surge in the company’s shares this year, compared with an 11% drop for the Bloomberg Asia Pacific Airlines Index. The stock slumped 37% in 2015.

 

The earnings rebound has also enabled the carrier to repay debt of about 11 billion baht ($318 million) so far this year, Chief Financial Officer Narongchai Wongthanavimok said in the same interview. The state-controlled airline’s total loans and bonds including plane financing totaled 179 billion baht as of June 30, falling from 192 billion baht on Dec 31, its financial statements show.”

Thai Airways A350

Thai Airways A350

The airline has also invested heavily in technology, with a new fare pricing system that can act dynamically and in real time – it monitors rivals’ air fares and adjusts Thai’s own fares within hours of being posted, making the airline more competitive with low cost airlines but also not undercutting potential lucrative high yield Business Class revenue against regional heavyweights Singapore Airlines and Cathay Pacific.

The Bangkok Post adds:

“Thai Airways has the capacity to compete with other leading carriers again,” said Charamporn, who will step down in February when he turns 60, the mandatory retirement age for heads of state-controlled Thai companies. “The carrier will be much more responsive to survive in the very tough airline industry.”

Overall these are all positive changes at Thai.

Having flown the airline extensively, its nice to see the inflight service return to its previous levels with rumors enhancements on the way. It’s also nice to see the A350 being introduced into an already modern fleet of 777s, 787s and A380s – fleet rationalization has always been elusive at TG. And it’s also a very positive development to see the corruption and government bureaucracy finally being stamped out of TG.

Thai is too significant of a carrier to be marginalized – as an aforementioned Star founding airline, the national carrier of Thailand and a traditional juggernaut of the industry, it is fantastic to see the airline finding its legs again. Long may it continue.

 

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