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Home  >  thai airways  >  Big Trouble For Thai Airways As Losses Double
thai airways

Big Trouble For Thai Airways As Losses Double

Matthew Klint Posted onNovember 9, 2018November 9, 2018 8 Comments

After the latest fiscal quarter, Thai Airways has much more to wrestle with than unhappy pilots who delay flights when they are denied a first class seat. But it is all connected.

Thai Airways just suffered a particularly bad third quarter. The airline reported a quarterly loss of 3.69 billion baht ($111,548,700). That’s just for the third quarter and 103% higher than the same period last year.

Oh, but revenues were up 2.2% points out Thai Airways President Sumeth Damrongchaitham. Damrongchaitham blamed rising fuel costs and lower demand during Thai’s traditional low season as the reason for the higher loss than expected. It appears that Chinese demand has particularly weakened. Overall, costs were up 11.3% including a 5.5% rise in non-fuel related costs for maintainence.

Thai Airways also blamed the following:

  • Typhoon Jebi (Japan)
  • Earthquake in Hokkaido (Japan)
  • Typhoon Mangkhut (Hong Kong)

Japan and Hong Kong are key routes for Thai Airways.

The Deeper Problem

Now that I’ve summarized the financials, let’s get to the heart of the issue. It’s more than just spending exceeding revenue. Indeed, the problem Thai faces is directly related to the recent fight amongst employees over a first class seat.

> Read More: Captain Delays Flight 2.5 Hours When Denied First Class Seats For Friends

Why are people booking away from Thai? One reason is high prices for an inferior product. Thai’s business class seat is deplorable on many routes and yet the carrier often charges more than it rivals. The airline also has older, inefficient aircraft and labor contracts that are no longer regionally competitive. Stories of graft and nepotism abound. Accountability is dependent upon who you know, not clear and transparent rules.

It is not surprising that all that leads to losses.

CONCLUSION

What is Thai’s solution? It may be too late. I am not even hinting the flag carrier of Thailand would ever shutdown. It won’t. But I don’t see an end to losing money year after year. Thai hopes to be profitable by 2022, but will need to do a lot more than blame the weather and Chinese tourists to return to profits.

image: Chihaya Sta / Wikimedia Commons

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About Author

Matthew Klint

Matthew is an avid traveler who calls Los Angeles home. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel.

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8 Comments

  1. Sang Kancil Guru Reply
    November 9, 2018 at 5:04 pm

    Just privatize all national airlines. When they are run by govts, they always lose money.

    • Stc Reply
      November 10, 2018 at 11:15 pm

      You’re right. Has any government run airline ever made money in the long run? I’ve yet to hear of it. Even with all the competitive advantages they’re endowed with they still can pull it off.

  2. Paolo Reply
    November 9, 2018 at 7:07 pm

    Watch this space. Next they’ll start tinkering with ROP ( their FF program) and that will be the end of them; many long time Thai loyalists have hung around simply because the benefits are superior to most competitors, even though most other aspects of TG are pretty ordinary.
    I’ve barely had a flight with them this year and no plans for any in 2019 other than points redemptions.
    This is an airline that has made the disastrous mistake of believing its own PR/spin, and all the while pandering to staff and to the freeloading hiso amart. The paying public can go to hell.
    Seriously, the best they come up with is some weather? They deserve to go broke in that case.

    • Eddie Reply
      November 9, 2018 at 8:46 pm

      I fly Thai on the LHR/BKK route about 4 times each year. Only ever buying a full fare economy ticket as need flexibility. In my experience at least half of the time I get 3 seats to myself on my preferred flights. In March 2018 from BKK to LHR there were only 200 passengers in total on the A380. Just about everyone in economy had 3 seats each.
      Service attitude of the crew has declined a bit in the past few years but they are still better than BA or EVA on this route.

      On the occasions that I’ve used mileage to upgrade to business class I have found the service very good. No complaints.

      THAI seems to be very uncompetitive in marketing and a less favoured option than middle East carriers. Personally, avoiding a stopover is preferable.

      It seems that the only passengers flying THAI in First Class are well connected Thais. Are they paying for their tickets?

      The ROP FF program has quite good benefits and if they cut that, many passengers would look at the alternative carriers.

      THAI seems to have too many differing models of planes and use them in an inefficient way. I. E. 747s on the BKK/HKT route and 777s on the BKK/CNX route. No wonder their losses are so high.

  3. Paul Kensbock Reply
    November 9, 2018 at 8:16 pm

    The only reason I fly them it’s the only airline that has direct flights to Brisbane.I hate the way they transfer from plane to the terminal by bus .

    • Mike Reply
      March 12, 2019 at 1:21 pm

      Yeah! Thats terrible and they do it in Bangkok almost on every occasion! Domestic flights from and to Phuket are almost every time boarded by bus, airplane parked at the Thai Airways maintenance hangar (maybe cheaper to leave it there?).

      Also international flights to ASEAN countries many times were boarded by bus. Seems that they only board direct flights to Europa via the gate… A little bit disappointing and annoying at the same time if you book a ticket with a premium airline and you’re driving 25 minutes with the bus to your plane while you see all the cheap carriers like Scoot and VietJet parking directly at the terminal and getting boarded by the bridge…

  4. ron Reply
    November 9, 2018 at 9:52 pm

    Too bad. I like this airline and the FF program. But it seems management is too inwardlooking.

  5. Paul c rey Reply
    November 10, 2018 at 10:28 pm

    I fly with them on the LHR/BKK route quite often, and its the only airline that does not charge for a reserved seat, but rather odd things can happen as when i turned up at bangkok airport to fly back to london , the flight was not existant which entailes .e flying to munich, then lufthansa on to london, on an old 747 .

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