Thailand’s flag carrier Thai Airways has struggled financially in the face of fierce regional competition but will escape bankruptcy thanks to a pledge by the Thai government to prop up the ailing carrier. The government has demanded austerity, though, as Thai finds itself in an unenviable position of flying aged gas-guzzling aircraft with labor costs that are not competitive in 2015. First on the chopping block was Bangkok – Johannesburg and Moscow, Madrid, and Phuket – Seoul routes will soon be history.
JNB, MAD, DME Route Cuts — LAX Also on Chopping Block
The trimming of excess has already begun–
The national airline would have to cut expenses, increase revenue, drop unprofitable routes, restructure its assets and sell some aircraft. The airline would also have to make changes to management, personnel…
The airline would also have to make changes to management, personnel and staff benefits, and travel agents who take up ticket quotas would be fined for unsold, returned tickets, Gen Prayut said.
Thailand plans to shed 10% of its flights (with more domestic flights shifting to Thai Smiles) and reduce its workforce from 25,000 to 20,000, but in typical Thai Airways fashion will not lay off anyone yet or implement all cuts immediately, but instead play a wait-and-see game over the next few months.
But JNB is already gone and BKK-MAD/DME will soon be cut as well as the HKT-ICN route. Rumors are swirling that the loss-leading BKK-LAX route (it no longer is non-stop, but instead makes a technical stop in ICN). Thai will compensate for the reduced service in the short-term by increasing frequency on “profitable” flights to China and Japan.
Decisions on routes that do not make a profit but are considered to have potential will be made in the fourth quarter. They include Bangkok-Rome, Bangkok-Milan, Bangkok-Brussels, Bangkok-Brisbane, Bangkok-Sapporo, Bangkok-Colombo, Bangkok-Denpasar and Bangkok-Hyderabad.
Loss of Most Three-Cabin Service to Europe
Thai will retire its A340-600 and 747-400 three-cabin fleets, replacing many European destinations with two-cabin 777s and eventually 787s. The upside is fully lie-flat seats in business class on the new aircraft, but a loss of first class and with that a dependable Star Alliance first class redemption option.
Frankfurt and Paris will retain the three-cabin A380 and London will swap from a 777 to an A380 (Hong Kong will lose the A380).
> Read More: Spin-Off of Thai Smile Another Blow to Star Alliance