Will Thai ever come back from this?

Old Mar 28, 2020, 5:59 am
  #1  
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Will Thai ever come back from this?

The standard answer is that the Thai Government (for "Face" reasons) can never let it go;and, in the past, i have always agreed with that statement.
Now i am not so sure. The Thai government has many ,many claims on its cash right now; various mega projects, an always hungry military and now the impacts of this crisis. When I look at its last published accounts, incl debts and other obligations and then consider the fleet profile and aircraft age, and given the current market dislocation, i am increasingly convinced that its no longer viable in its current form; and i mean not even close to being viable! My guess is that a 3 to 4 billion USD injection of equity or zero coupon debt is about what it will take for the airline to even survive.
I strongly suspect that when it flies again it will be as a very different kind of airline.The full service, multi destination offer will have to be significantly scaled back in my opinion, costs will need to be radically lower.
For sentimental reasons, having flown Thai for many years, as a premium customer, and generally been happy with the service, I hope i am wrong. I would love to hear contrary and more positive assessments of the airlines situation.
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Old Mar 28, 2020, 5:51 pm
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My assessment is based on this (fault my logic if you can):
  1. Until there's a proven vaccine widely available most (all?) countries will continue to control their borders by imposing some form of quarantine on all arrivals
  2. We're told that a vaccine is 12+ months away
  3. Getting the vaccine widely used will add a month or two (at least) to that timeframe
  4. Therefore international travel will not resume any form of "normality" for (best case) 18 months
  5. Thereafter travel for tourism will be minimal while households in most countries get over the economic shocks in their own country's economy
Therefore whether TG is supported by its government or not, you won't be flying on them any time soon
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Old Mar 29, 2020, 8:14 am
  #3  
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Originally Posted by wordchild
The standard answer is that the Thai Government (for "Face" reasons) can never let it go;and, in the past, i have always agreed with that statement.
Now i am not so sure. The Thai government has many ,many claims on its cash right now; various mega projects, an always hungry military and now the impacts of this crisis. When I look at its last published accounts, incl debts and other obligations and then consider the fleet profile and aircraft age, and given the current market dislocation, i am increasingly convinced that its no longer viable in its current form; and i mean not even close to being viable! My guess is that a 3 to 4 billion USD injection of equity or zero coupon debt is about what it will take for the airline to even survive.
I strongly suspect that when it flies again it will be as a very different kind of airline.The full service, multi destination offer will have to be significantly scaled back in my opinion, costs will need to be radically lower.
It has not been properly viable for many years now. Government interference, both good and bad, has meant that it would be quite a different airline if it were actually were run independently over the past decades pretty much ever since it was founded although most obviously since 2008 when it started losing a lot of money.

In the long term, yes it will have to change to stay competitive, with the obvious changes being fewer staff, a simplified and probably smaller fleet, destinations that make sense in terms of supply and demand, better pricing algorithms. However, government influence will still dictate these changes or lack thereof unless they stop interfering for once and for all.
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Old Mar 30, 2020, 4:18 am
  #4  
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Originally Posted by RTWFF
My assessment is based on this (fault my logic if you can):
  1. Until there's a proven vaccine widely available most (all?) countries will continue to control their borders by imposing some form of quarantine on all arrivals
  2. We're told that a vaccine is 12+ months away
  3. Getting the vaccine widely used will add a month or two (at least) to that timeframe
  4. Therefore international travel will not resume any form of "normality" for (best case) 18 months
  5. Thereafter travel for tourism will be minimal while households in most countries get over the economic shocks in their own country's economy
Therefore whether TG is supported by its government or not, you won't be flying on them any time soon
Your five points will apply to most/all airlines.
To add to your gloom, I admire your optimism for a vaccine. None was ever found for Ebola or SARS. Science is more advanced and research funding will be huge. But that assumes that this coronavirus will not mutate (e.g. influenza) and that sufficient immunity will last for a sufficiently-long period of time.

On the other hand, doom is never certain. There will be a restructuring of the airline industry, but years pass quickly.
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Old Mar 30, 2020, 3:31 pm
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Originally Posted by brunos
To add to your gloom, I admire your optimism for a vaccine. None was ever found for Ebola or SARS. Science is more advanced and research funding will be huge. But that assumes that this coronavirus will not mutate (e.g. influenza) and that sufficient immunity will last for a sufficiently-long period of time.
I was merely regurgitating the "received wisdom" about a vaccine. What I believe about its likelihood cannot be inferred from what I wrote

I note that the NZ prime minister, Jacinta Adern, clearly read my post* as she made the same points about her own country and international travel resuming yesterday. Countries that have a heavy reliance on tourism - NZ and Thailand, for example - will suffer for a long time

* yes that was a joke
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Old Mar 30, 2020, 7:59 pm
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Govt won't let THAI go under: Somkid

Deputy Prime Minister Somkid Jatusripitak on Monday said the government will not allow ailing flag-carrier Thai Airways International Plc (THAI) to collapse and dismissed rumours of impending lay-offs as a result of the coronavirus crisis.

Mr Somkid said the government is ready to help the national airline, which was already beset with financial difficulties even before the pandemic began. While he insisted that THAI won't lay off any employees, the deputy premier urged the THAI board to come up with a business plan which proves that the company can still grow and expand after the crisis.

https://www.bangkokpost.com/business...o-under-somkid
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Old Mar 31, 2020, 12:22 am
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THAI is a vital element in national infrastructure, and will not be allowed to disappear - so I am not surprised by this announcement.

In addition, they say that they might take this opportunity to have another attempt at fleet rationalisation. Sadly, I think that could mean goodbye to the 747s all at once like other operators have done recently by speeding up retirement. Let us hope that "rationalisation" is not done in the usual spirit of buying a little bit of everything (having a fleet of 2x 789s come to mind...)

https://www.bangkokpost.com/business...grounding-jets
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Old Apr 1, 2020, 1:45 am
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Originally Posted by SKT-DK
THAI is a vital element in national infrastructure, and will not be allowed to disappear - so I am not surprised by this announcement.

In addition, they say that they might take this opportunity to have another attempt at fleet rationalisation. Sadly, I think that could mean goodbye to the 747s all at once like other operators have done recently by speeding up retirement. Let us hope that "rationalisation" is not done in the usual spirit of buying a little bit of everything (having a fleet of 2x 789s come to mind...)

https://www.bangkokpost.com/business...grounding-jets
For fleet rationalisation from previous news, the old B772 will not come back into the active fleet after this crisis but they don't mention about B747.
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Old Apr 1, 2020, 5:15 am
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Originally Posted by joy16
For fleet rationalisation from previous news, the old B772 will not come back into the active fleet after this crisis but they don't mention about B747.
The 747 might be viable in certain situations where the freight cargo revenue can justify it.

SL
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Old Apr 1, 2020, 7:21 pm
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Operational Hibernation? Prince Charming will be along in a few months?



Thai Airways International (THAI) operated its last international service out of Suvarnabhumi International Airport Wednesday, before the flag carrier goes into an "operational hibernation" because of the Covid-19 pandemic.

Flight TG920 bound for Frankfurt, Germany took off at 5.15am on Wednesday, more than five hours later than usual. The flight took off with a grim warning in its wake.

The International Air Transport Association (IATA) published an analysis which shows that airlines may burn through US$61 billion (about 2 trillion baht) of their cash reserves in the second quarter of the year, which ends on June 30, while posting quarterly net losses of about $39 billion.

https://www.bangkokpost.com/thailand...es-severe-iata
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Old Apr 1, 2020, 9:01 pm
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Originally Posted by brunos
None was ever found for Ebola or SARS.
I know it's off-topic, but there is one approved for Ebola.
https://en.wikipedia.org/wiki/Ebola_vaccine#rVSV-ZEBOV
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Old Apr 4, 2020, 3:47 am
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Originally Posted by rowanparker
I know it's off-topic, but there is one approved for Ebola.
https://en.wikipedia.org/wiki/Ebola_vaccine#rVSV-ZEBOV
Thanks and good news. FDA approved Everbo on 19 December 2019.
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Old Apr 4, 2020, 7:24 am
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THAI is a vital element in national infrastructure


Domestically, they won't be missed - who wants to be bused to the international gates for a domestic flight just to fly a wide body for 55minutes - not me - there's healthy competition on nearly all routes (absent Samui which is Bangkok Airways dominated) with multiple operators (both in and out of BKK and DMK). Internationally is there any route they fly directly to that isn't served by the flag carrier of the desination, combined with fifth freedoms there's sometimes even a third option (would be second I guess if they failed) such EVA on BKK-LHR.

Would be good for the people of Thailand to let it fail, job losses would be painful in short-term but its a cash sink for far too many years, money that can be deployed on chinese built submarines or other things for the benefit of the people.

Presumably Thai Smile stands alone, it would be a shame to lose them, but you still have Vietjet and Bangkok Airways from BKK if DMK isn't near you.
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Old Apr 4, 2020, 11:46 am
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Originally Posted by mattspod
Would be good for the people of Thailand to let it fail, job losses would be painful in short-term but its a cash sink for far too many years, money that can be deployed on chinese built submarines or other things for the benefit of the people.
I think most people, especially on this forum, might prefer money spent on keeping TG flying, as opposed to buying Chinese submarines.
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Old Apr 4, 2020, 2:35 pm
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Originally Posted by mattspod
). Internationally is there any route they fly directly to that isn't served by the flag carrier of the destination?,....
There are some:
BKK-AKL NZ no direct flights
BKK-BNE QF no direct flight
BKK-MEL QF no direct flights
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