Thai Airways Halt Expansion Plans

3rd Oct 2019

AirAsia Plane

Thai Airline put a major order plan to add 38 new aircraft to its existing fleet on hold. An ATW news article suggests that the decisions to halt the new plans were carried out in a recently held board meeting.

The meeting also proffered that a new plan should be devised and brought forward in the next six months. With no objections from the company’s stakeholders, there were other welcoming suggestions to focus on core aspects such as the current industry environment and the source of investment funds in formulating the new acquisition plan.

Future Plans

Thai Airlines might have plans for expansion in order, but the state-owned group recently announced yet another loss of THB 698m ($22.5m) for the second quarter of 2019. Nonetheless, to recuperate from the massive loses and avoid future struggles, Thailand’s flag carrier has put a six-point strategy in motion. One of the significant points of the new policy is the “Zero Waste Management” program; the program reflects upon the company’s goal of reducing food wastage to absolute ‘zero.’

Other preventative measures, such as revisions to the business’ current online booking system, with a brand new marketing strategy, will also be introduced to expand the existing customer base.

Amid all this, the carrier also hopes to improve the internal relationships with its subsidiary company Thai Smile.

Plans for Expanding the Air Fleet

With the new order being declined, plans for adding new aircraft with the likes of narrow-body and wide-body were cancelled but the company still intends to lease three Boeing 777-300ERs which were signed for the last year and will be delivered in the last quarter of 2020.

The current fleet comprises a total of 82 aircraft, with the Boeing 777s holding the highest share of 32 units. The airline also features a significant Airbus holding.

The Big Picture

Undergoing significant losses, Thai Airways would be in jeopardy if the turnaround strategy isn’t implemented effectively. In attempts to improve upon the current scenarios, the company reached out to its customer base, taking suggestions on the cost-cutting ideas.

The state-owned airline aims to providing exemplary services, but that won’t be achievable unless it figures out a way of cutting costs. Once done, the board might give a thought to the suggested acquisition plans.