Thai Airways has announced the latest step in its major restructuring plans that will see it sell off 22 of its aircraft and terminate freighter services as it struggles to overcome seven straight months of losses. The carrier – with nearly US$5.9 billion in debts – will cease operating its final two B747-400BCF services by end of the month.
Thai Airways was once a leader in the cargo market, but the company has stopped and started its freight services multiple times in recent years. The carrier was among the first to use a B777F in hopes of returning to freighters but a stagnant air cargo market defeated the plans. Bangkok Flight Services has said that Thai exports were down four per cent in February, year-on-year despite the gradual pick-up in the global air cargo market.
The company will also stop A340-600 services and four A330-300 aircraft will also be decommissioned. By July, Thai Airways hopes to sell 22 of its aircraft including A340-500s, A300-600s, B777-200ERs and B737-400s all of which are currently parked. The carrier will continue with plans to add two B787-8s and two B777-300ERs along with A330-300s, and A350-900s.
The company’s restructuring is being overseen by Thai Airways president Charumporn Jotikasthira who is expected to cut capacity by 20 per cent, sell non-core assets and reduce the fleet size from 101 to 77 aircraft by the end of 2015. As part of the downsizing, the company will cut routes to Moscow, Johannesburg and Madrid.
Dubbed the ‘Thai Transformation Roadmap’, the two-year plan features three phases. The first stage is designed to mitigate losses through the termination of lossmaking routes while enhancing revenue on profitable routes or destinations that have strong growth potential.
The second stage aims to boost Thai’s competitiveness in the areas of product, service and human resources while enhancing its ability to both control costs while boosting revenue inflows.
The final stage of Thai’s restructuring plan will be to grow its business on the back of new organisational strengths thereby ensuring long-term sustainable profitability.