Thai airways to downsize fleet by more than 24 in 2016

Thai airways to downsize fleet by more than 24 in 2016

Ailing Thai Airways International plans to downsize its fleet by more than 24 aircraft by next year and focus more on maintenance services to extract more revenue from non-core businesses.

Charamporn Chotikasthira, president of THAI, said yesterday that the board of directors on Monday approved a plan to sell eight more aircraft, of which half are Boeing 737 and half Boeing 747 models.

The flag carrier also plans to sell eight more aircraft in the second half of this year. Planes to be put on the market are Boeing 747 and Airbus A340 models. The proposal will soon reach the board for approval.

The airline also hopes to sell eight more planes next year.

The national airline has planned to dispose of 42 aircraft from 2015-16 as part of its business recovery and restructuring plans. Since the beginning of this year, it has already unloaded 18 aircraft.

Besides selling old aircraft to generate cash, the airline will focus on expanding maintenance work, services and overhauling to more customers. Besides THAI's fleet, the maintenance unit is now servicing THAI Smile and Nok Air.

"The airline business is growing fast, especially with Don Mueang International Airport reopening this year. And we still have 12 hours each day to serve other airlines, which will help increase revenue," Charamporn said.

Next week, the airline will finalise its early-retirement plan and offer it to staff. The plan is part of cost-cutting measures initiated to restore finances and also revive business that has been struggling for several years.

The airline has earmarked Bt5.5 billion (S$219.4 million) for early-retirement packages and other headcount reductions.

Meanwhile, passengers are coming back, Charamporn said. There were 20 per cent more of them during the first five months of this year than during the same period last year. This reflected the surge in arrivals from China, while the European market remained slow because of economic problems in that part of the world.

THAI realised a second-quarter average load factor of less than 70 per cent, which is still under the target.

"We will learn from other airlines how they can achieve a 70-plus-per-cent load factor despite the same low season. However, foreign-passenger numbers are expected to jump in the coming high season," he said.

Regarding the current outbreak of the Middle East respiratory syndrome, Charamporn said the airline still had seen no signs of difficulty from the epidemic, as Thailand is a third country and not directly involved in the disease.

THAI is operating the usual six flights per day to South Korea. The airline is applying intensive prevention measures against Mers.

The airline also claimed that it met international standards including for air safety and security despite other airlines as well as the Civil Aviation Department coming under pressure from the International Civil Aviation Organisation to improve safety.

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