Will Thai Be The Next Airline To Collapse?

Thai Airways are close to collapse, according to news in Thailand,

The Bangkok Post reports that the airline has lost 6.4billion THB (£164million) in the first half of this year, bringing their total debt to 208billion THB (£533million).

In a message sent to airline executives, the airline president voiced his concerns:

“Today I want staff to be united to overcome the obstacles. Otherwise, the national airline must close down. There is still time for a solution, but there is not much time,”

Sumeth Damrongchaitham, THAI Airways President

The president also commentated the airlines current difficulties came from the intense competition the airline is suffering. Within Asia, the regions low cost carriers get most of the market share. On longer routes, the Middle Eastern airlines are the go to choice.

Thai plans to stem the cash flow issue by introducing pay cuts for the top management and adopting a zero inventory policy at its catering department.

Thai employs more than 20,000 people.

Should the airline collapse, it would leave Thailand without a national carrier. Having said that, the airline is government owned, so one can assume they would be bailed out. Although this can’t be relied upon. What could happen is a massive reduction in services, a lot like what happened at Malaysia Airlines.

Thai Airways currently operates quite a large and varied fleet of both Boeing and Airbus longhaul aircraft. Despite having a fleet of 84, the most of one type of aircraft they operate is 14 Boeing 777-300ER. Much of the fleet consists of less than 10 of one single type, which surely can’t be cost effective.

On a personal note, the Thai Airways ground experience at Bangkok was one of the best I had. Their First Class lounge made it on to my personal top 10 list back in May.

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