News
THAI seeks return to profitability amid fleeting and destination woes
April 29th 2016
Thai Airways International (THAI) has been asked by its military government minders to produce an operating profit of twelve billion baht ($341 million) and a net profit of two billion baht this year, the Bangkok Post reported this week. Read More » THAI was among the worst Asia-Pacific performers in 2014 and 2015, posting full-year net losses of $453 million and $379 million, respectively.
THAI CEO, Charamporn Jotikasthira, recently said load factors in the first quarter of this year had improved significantly to 77.9% , from 68.9% in 2014 and 75% in 2015, but this is still short of the 80% targeted.
The Star Alliance carrier has made considerable cuts to its fleet and network in the past year. However, THAI’s fleet is still very inconsistent: it operates a small number of various aircraft types and variants, making it near impossible to achieve sensible economies of scale or a unified passenger experience.
Having said that, controversy still surrounds the carrier’s twelve on-order A350-900s and two B787-9s. "Today, we have a 73% cabin load factor, so we don't need to expand anywhere," Charamporn told Reuters at ITB in March. "Financially, we don't need the planes and commercially we have not sold enough tickets. The more capacity we have, the more trouble we will run into, so the more we can delay the better," he added.
Airbus told Orient Aviation then it was working with the airline to prepare for the entry-into-service of the [A350s] in the middle of the year. Earlier this month, the manufacturer posted images of THAI’s first A350 rolling out of its Toulouse paint shop in full carrier livery.
Charamporn last week said the flag carrier has added Cebu to its destination list, which will be launched when the airline is “ready”. THAI serves Manila with ten weekly frequencies. It also plans to relaunch services to Moscow from October and has often gone on record in the past year saying it hopes to resume service to the U.S., subject to the FAA and ICAO lifting their safety red flags
Teerapol Chotichanapibal, THAI executive president in charge of commerce, said in early April possible landing cities were Los Angeles, Washington, New York or San Francisco. This was later corrected by Charamporn who said Los Angeles had been ruled out after learning from past mistakes. THAI dropped the unprofitable route last year.
In other Thai aviation updates, LCC Thai AirAsia has signed a Memorandum of Understanding (MOU) with the Royal Thai Air Force that covers cooperation in ground operations, facilitation of missions and training. Specifically, the Royal Thai Air Force will forward pilots to gain experience piloting Thai AirAsia’s A320s.
