Thai Airways International Fight in Crisis Times

Thai Airways International, Thailand, coronavirus

Thai Airways

The losses for Thailand national carrier, Thai Airways International, last year reached US$400 million, up by 25% over the previous year. Many factors including heightened competition, the strong Baht or the Hong Kong political crisis impacted the airline negatively. The coronavirus crisis will certainly not help to revert the airline’s fortunes in the short term…

Despite having transported 24.5 million passengers, an increase of 1% over 2018, Thai Airways International saw its losses from last year widen by US$109 million to a total of over US$400 million, as passengers’ revenue fell by 7% while operating revenue declined by 7.7% to a total of US$ 5.93 billion. Yields per passengers fell by 6.8% last year with RPK down 1%. However, the average load factor progressed by 1.5 points to 79.1%. The fleet remained unchanged at 103 aircraft with Thai still struggling to define what would be its future fleet as the government has delayed its decision on aircraft’s renewal.

There are internal issues to Thai Airways International management system which is linked to the political sphere. But external factors contributed a lot to the carrier’s bad performance. Civil violence in Hong Kong, a decline in Chinese tourist arrivals following the boat accident in Phuket, the stronger Baht, the US-China trade war and above all, bigger competitions from low-cost airlines. Chinese carriers and Middle East carriers on long-haul routes were some of the factors behind Thai Airways International mediocre financial results.

Looking ahead, Thai Airways International is likely to be severely affected by the impact of the coronavirus crisis. Demand for flights is collapsing as more countries are now affected by the coronavirus crisis around the world. After China, Thai Airways has been forced to reduce flights to South Korea, Japan and now to Italy by suspending flights to Milan. More capacity reductions are likely as tourism to Thailand is in free fall state while Thailand outbound market remains flat.

The Star Alliance member will focus on raising revenue through greater digitalisation and use of data, effective cost control, as well as improving operational efficiency by expediting the stalled aircraft acquisition plan and selling older aircraft. The carrier also decided to diminish the salaries of its executives for at least six months in a move to stem losses.

For passengers affected by travel restrictions and bans due to the Coronavirus COV-19, Thai Airways International as well as its affiliate Thai Smile offer free changes of destination for passengers or free cancellation.