MIAMI – Blaming continuous immigration restrictions and government measures, Thai Airways (TG) has extended the suspension of its international flights until September.
Thai Airways has not flown international services for several months now. It looks like it will take a bit longer before Thai’s distinctively liveried aircraft return to the skies.
Thai Airways said, “We appreciate the continuous disruption and inconvenience this may cause to passengers and truly apologize for this.”
Flights suspended since March
Thai Airways began to suspend its flying back in March as COVID-19 started to bite. The decision was a no-brainer. Thailand closed its borders to non-residents and citizens around the same time.
To grasp the impact of the decision, TG had considered that tourism usually accounts for one-fifth of Thailand’s gross domestic product. In April 2019, 3.2 million visitor arrivals poured US$4.7bn into Thailand’s airlines, hotels, and businesses. In April 2020, zero visitors arrived.
But the problems at TG predate the travel downturn in 2020. The airline’s owner, the Thai Government, has long propped it up. The Thai Government has always placed considerable importance on TG to stay in the air, no matter the cost.
Thai Airways Gets Pushed Closer to The Edge
51% of the company’s shares are owned by the Thai government, which, despite not guaranteeing a loan of US$2.8bn, has decided to take the path of bankruptcy: this has led to the closure of the Thai offices in Malpensa with the cancelation of the route to Bangkok.
Even before the crisis caused by the COVID-19, the carrier was not sailing in excellent waters: this accelerated the bankruptcy process.
Things have not got any easier at the airline since then. With borders remaining closed both in Thailand and abroad, TG has kept rolling over the flight suspensions. Except for some repatriation and cargo flights, Thai’s international fleet has remained on the ground.
A New President in The Hot Seat
New Acting President Chansin Treenuchagron (58) is a former president of a state-owned oil and gas conglomerate. Mr. Treenuchagron only joined Thai’s board in June 2020. He does not appear to have any particular expertise in running airlines.
But Mr. Treenuchagron has promptly set up a “survival team” to produce a business plan as part of the business rehabilitation process. This plan is due to be submitted to Thailand’s Central Bankruptcy Court on August 17.
Employees and External Suppliers Unhappy
While the airline was insisting in June that jobs would not be lost in the short term, the frontline staff is deeply unhappy pay and benefits cuts, reduced between 10 and 50% in June.
Employees have also reportedly lost access to free upfront healthcare. Now, they have to pay for healthcare themselves then request reimbursement. It is a significant impost where salaries, even at TG, are not large.
Meanwhile, also in June, TG’s fuel supplier declined to extend further credit and began operating on a cash on delivery basis. While TG continues to roll over its international flight suspensions, problems at the airline keep piling up.
Without question, the Thai Government will ensure the airline goes back into the air, but the short to medium-term future for TG looks set to be a painful time
The fleet is exclusively long-haul and is made up of Boeing and Airbus aircraft: Airbus A330-300, A350-900, and A380-800; Boeing 747-400, 777-200 / 200ER, 777-300 / 300ER, 787-8 / 9.
Previously, the Asian carrier also had the Airbus A340-600, removed due to excessive costs, which was often used on the Malpensa Bangkok route.
In this regard, the company has decided to downsize the fleet, keeping in service: A350-900, Boeing 777-300ER, and the 787 family, which are the planes that fill up more easily and have a very low maintenance cost.