Thai Airways Royal Orchid Plus - Thai puts off new plane purchases

http://www.thaivisa.com/forum/topic/573518-thai-airways-to-put-off-new-plane-purchases-due-to-its-poor-financial-performance/



Thai to put off new plane purchases
Bamrung Amnatcharoenrit
The Nation

BANGKOK: -- National carrier Thai Airways International Plc (THAI) will delay the purchase of 47 new aircraft due to its poor financial performance this year.

The purchase plan itself will still be submitted to the Cabinet for approval this month. Of the total, 38 aircraft will be bought for THAI and nine for low-cost subsidiary carrier THAI Smile. Under the revamped plan, the size and number of the new aircraft will depend on the destinations they are to serve.

The firm is shifting its focus to regional destinations in preparation for the opening of the Asean Economic Community (AEC). These routes will be covered by THAI Smile.

Chokchai Panyayong, THAI's acting president, said the purchase review was part of business strategy and investment plan flexibility to minimise losses this year.

He said that this year the firm would miss its sales-growth projection of 3 per cent to Bt200 billion.

In a recent interview, he also acknowledged that the firm would be even less likely to meet its net-profit target of Bt6 billion this year.

Local media reported last week that THAI would suffer a loss of Bt2 billion during the off-season period, which covers the second and third quarters of the year.

For the remainder of this year, he said the strategy would be more flexible to meet with the changing business environment. In particular, launches of new destinations would be studied in detail. Competition from both low-cost and full-service airlines and the number of potential passengers would also be discussed.

Chokchai has refused to drop the plan to launch a new low-cost airline. The firm is still studying the feasibility of a launch in 2013 by forming a joint venture with Nok Air, a low-cost airline in which THAI holds a 49-per-cent stake.

For THAI Smile, which marked its first flight on July 7, he said the sub-brand of THAI had received a good response from the market so far and claimed it had a cabin factor (percentage of seats sold) of 80-90 per cent.


-- The Nation 2012-07-30

I really fear that in the future TG will really become an outdated, low-quality, low-cost carrier.

This might just be politics and posturing, and maybe even a bit of legitimate business.

First of all, keep in mind this is phase 2 of their fleet development plan, so the purchase that has been delayed was for aircraft to start arriving in 2018 and after. Aircraft for deivery from now through 2017 were ordered last year (or earlier.)

There's new leadership now, so it's somewhat understandable that they want to exercise a bit of authority in shaping the company's future, with this major purchase opportunity at hand.

A point in the article was that they may be looking to revise the "mix" of planes in this purchase decision; their emphasis on future routes may be changing (as low cost carriers emerge around them.) It's a challenge to project what aircraft you'll need well into the future, get orders in (ahead of competitors) so you'll have them when needed, and hope the competitive market doesn't change in the interim.

The point about delaying purchase because of the weak performance this year sounds like somebody blowing smoke. The article indicates they are missing profit targets, but apparently still expected to be profitable for the year. And this purchase decision is for aircraft 6+ years away from delivery.

If only the corrupt Thai politicians would stop putting their hands in the cookie jar!!!

If only the corrupt Thai politicians would stop putting their hands in the cookie jar!!!

Dream on :)

Dream on :)

+1

This place is so corrupt,, I have been FLying TG as TG GOLD for 10+ years. and All i see is Downhill.. Service is good if ur a westerner, but if your local, they dont really care for you. The Flight crew always disappears on ULH routes and if they are there, they are asleep. RIP TG,, I wish u can bounce back but u fired the only capable leader a few months ago..I'M OFF TO EK AND CX....

This place is so corrupt,, I have been FLying TG as TG GOLD for 10+ years. and All i see is Downhill.. Service is good if ur a westerner, but if your local, they dont really care for you. The Flight crew always disappears on ULH routes and if they are there, they are asleep. RIP TG,, I wish u can bounce back but u fired the only capable leader a few months ago..I'M OFF TO EK AND CX....

The only thing that keeps me flying TG is their low Asian J And F fares for which I can accumulate star mileage

This place is so corrupt,, I have been FLying TG as TG GOLD for 10+ years. and All i see is Downhill.. Service is good if ur a westerner, but if your local, they dont really care for you. The Flight crew always disappears on ULH routes and if they are there, they are asleep. RIP TG,, I wish u can bounce back but u fired the only capable leader a few months ago..I'M OFF TO EK AND CX....

A little bit harsh but somewhat true. As a westerner I always get very nice service being pleasant and smiling myself.

If cabin crew treat their countrymen poorly it might be because many of them never actually pay for their F or C seats. I can not imagine a TIP really paying for something he gets anyway for free in this corrupt nepotist country with its self service mentality.

Of course a company allowing such practices can not generate the cash flow to buy new planes. So no surprise there.

A little bit harsh but somewhat true. As a westerner I always get very nice service being pleasant and smiling myself.

If cabin crew treat their countrymen poorly it might be because many of them never actually pay for their F or C seats. I can not imagine a TIP really paying for something he gets anyway for free in this corrupt nepotist country with its self service mentality.

Of course a company allowing such practices can not generate the cash flow to buy new planes. So no surprise there.

Um, no.

Several years ago, while battling through food poisoning, we were flying back from HKG. My, now, wife ordered ginger ale for me and mama for her. She was told that mama is only served on 'big planes'. We were on a 777.

When I came to and inquired about ginger ale, the third time the crew had been asked, they told me 'mot'. This had nothing to do with thai or farang, it was competance, something of which the purser and everyone below her were completely lacking.