Thai Airways : 10-year plan revised, routes and aircraft procurement at risk

Skyrocketing oil prices have clipped Thai Airways International’s wings, forcing the flag carrier to retrench on its 10-year business plan, including possibly paring routes and new aircraft procurement.

“The airline’s revision will also include its revenue projection,” THAI president Apinan Sumanseni said yesterday.

“THAI’s revenue this year will fall short of the target of Bt210 billion,” he said.

The new plan will be finalised by next month, but the airline has already decided to close its long haul Bangkok-New York route in July and cut frequencies to Los Angeles, London, New Zealand and Johannesburg due to higher jet fuel expenses, he said.

On July 1, the New York station will be closed down and flights to Los Angeles will be reduced from seven a week to five.

The company has already lost Bt4 billion per year for the two long-distance routes to New York and London,” he said.

The four A340-500s used to service the Bangkok-New York route will no longer be needed and sold off. The company bought the aircraft for $130 million (Bt4.3 billion) each.

The long-haul routes are struggling the most because they consume much more fuel.

The Bangkok-New York flight was launched in May 2005. The airline is running an average load factor of 80 per cent on the daily flights, but the return is still poor due to fewer premium seats. (Nation)

I think Thai Airways is mixing a little bit of everything there. Expensive oil can be a convenient way to erase… some big commercial mistakes.

For instance, the flights to New York / LA were obviously not a good idea (TA was loosing money, even before the oil problem).

Furthermore, why they don’t try to increase their fares for BKK/London for instance (a popular route) ? And what about Paris ? The daily flight (2 flights per day before 2005) is always full ?

Something must be kept in mind, in order to assess the situation at Thai Airways : this company is a nightmare… of mismanagement. And corruption in some cases (decade long investigations at the London bureau, small example, read here…)

Thai Airways is a public company. And for many years, it was the “backyard” of politicians and generals and the Air Force… This company is a toy. An expensive one, that was milked over and over.

It was easy to fool people when business was booming… Now the times are definitely getting tougher with the oil issue…

Now the real problems are going to come to the surface.

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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