DALLAS – Thai Airways International (TG) has announced that it will merge its low-cost unit Thai Smile (WE) back into the mainline company. The news comes as TG revealed its Q1 2023 profits, posting a total revenue of 41,507 million baht (US$1.2bn).
It forms part of the parent company’s restructuring process, and the merger is expected to be completed this year. TG’s creditors have approved the news and must now await approval from the country’s Civil Aviation Authority and transport minister.
The Bangkok-based carrier has been under a restructuring program after the COVID-19 pandemic, and strict restrictions across Asia saw its profits tumble. This has included restructuring its fleet, already disposing of 19 airframes with discussions moving ahead for the removal of a further 18.
Thai Smile History
Thai Smile commenced operations in July 2012 and is 99.99% owned by TG. The airline, which has its own Air Operators Certificate (AOC), boasts a fleet of 20 Airbus A320ceos. Despite Thai giving over its entire domestic network to WE, the subsidiary has struggled to return a profit for its parent after facing intense competition from low-cost rivals in the area that have much lower cost bases.
All 20 A320s will be transferred over to TG along with the airline’s staff. Its route network will also be absorbed back into the mainline carrier, allowing for greater coordination of short- and long-haul flights at its Bangkok Suvarnabhumi Airport (BKK) hub and streamlining its operations.
Thai becomes the latest Asian carrier to retire its low-cost units. Cathay Pacific (CX) closed down its Cathay Dragon (KA) unit in October 2020. Meanwhile, Singapore Airlines (SQ) folded its low-cost arm, Silk Air (MI), into the company in May 2021.
Featured Image: Thai Smile Airbus A320. Photo: Thai Smile.