Thai Airways: fleet dilemma as it works out of bankruptcy

Thai Airways is unlikely to be allowed to go bankrupt and vanish, the government, while having a reduced stake in the airline is never going to allow its flag carrier to sink.

It’s made huge losses, operates a complicated fleet of aircraft and needs to decide what it needs to be.

The airline is politicised in that The State and the country as a whole see it as representative of the nation and its position in the world.

That need to demonstrate Thailand is a leading nation and just as good as any of its neighbours, such as Malaysia and Singapore, all once considered so called “Tiger economies”, has led it to buy aircraft not just on the basis of need and practical application, but prestige.

It’s fleet contains 6 A380’s, all of which are currently grounded. As we’ve learned from AirFrance, Lufthansa, Qatar and Malaysia, and no doubt will from ANA in due course, such small numbers of such big aircraft are just not viable no matter how much you might want them to be.

The fleet still contains 8 747-400’s. They’d been withdrawn once and brought back because demand was high enough to justify their use, and the airline had slowed its new aircraft buying.

A fleet of 15 A330’s, 26 777’s (of which 6 are 772’s), 12 A359’s, 6 A380’s, 8 744’s, 6 788’s and 2 789’s, is complex and expensive to operate with so many different types; training, engineering, personnel and support issues are disproportionately high.

There is no doubt the 744’s are history. In all good conscience the 772’s should be going the same way. The A330’s perform an important regional role, but the 773’s with the A359’s should be all that’s required for the long haul in both the near and long term future.

Even keeping the A380’s grounded is bleeding cash. They have to be maintained even idle and they cost a fortune in storage fees as most are sat at the main airport. The likelihood of them ever making financial sense again is shrinking fast and the sooner Thai accepts the inevitable, the better. Yet that element of prestige still hangs over the airline. It’s almost as though admitting it can’t afford them is a sign of weakness. In business, especially with airlines, such emotional responses have no place.

The next slightly bizarre part part of the fleet is the 787’s. It’s an odd mix, it’s a low number and they should have had a real purpose. Instead they sit in a mid to long haul range/passenger requirement already largely met by the A333’s. There aren’t enough to be viable and it’s just another set of engines, pilots and maintenance requirements creating yet more cost.

Will Thai finally bite the bullet, rationalise it’s fleet down to at the most, three types? 773, A359 and A333? Or at least commit to replacing the A333’s with more 787’s and retire the former over a longer term.

The sensible thing would be to retain the cheaper A333’s because of pilot commonality with the A359, cut the A380’s, 787’s and 772’s and have the 773’s as the core part of the fleet for the foreseeable future, while they remain viable.

Like many former state owned airlines, Thai needs to rationalise and think about its future, its economics and making money to give it a long term prospect. If it doesn’t, like every other privatised or semi-nationalised airline, it will back asking for bailouts just a few short years down the road.