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THAI to lease, sell aircraft to turnaround after big losses in 1H


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THAI to lease, sell aircraft to turnaround after big losses in 1H

By The Nation

 

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THAI's president Sumeth Damrongchaitham speaks to the press on Tuesday. – The Nation

 

Thai Airways International (THAI) will consider leasing out three new aircraft and selling four existing aircraft to boost its revenue for the rest of this year after the carrier reported a net loss of Bt6.43 billion in the first half of this year, the company’s president Sumeth Damrongchaitham said on Tuesday.

 

“We expect our total revenue in the second half of this year to be better than the first half, when the baht depreciates now that the Monetary Policy Committee has cut the policy interest rate by 0.25 per cent early this month and September, high season for tourists, arrives,” he said. 

 

The national carrier is planning to boost the number of aircraft leased to European airlines by three and sell four existing airplanes and will propose this plan to its board soon. 

 

The airline will also buy foreign exchange after sustaining losses of 5 per cent when the baht appreciated in the first half of this year compared to the end of last year. 

 

“If we don’t do anything, we will suffer high losses for the rest of this year. We believe our business strategy will reduce our losses in the rest of this year,” he said. 

 

As for the plan to buy 38 new aircraft worth Bt156 billion, it needs to be reconsidered because the government has insisted that the funding for the purchase must come from the company, he said. 

 

Sumeth added that the airline has also announced its cost-saving schemes such as SaveTG Co-Creation, which reduces its management cost without having an impact on its service quality. 

 

The airline is also collaborating with other organisations to reduce its cost by following a zero-waste management policy. THAI is also planning to introduce new direct flights to Sendai, Japan in the last quarter of this year. 

 

THAI is also focusing on digital marketing to boost customers and reduce costs, and is cooperating with its business partners and subsidiary ThaiSmile to provide services and increase its income, he said.

 

Source: https://www.nationthailand.com/business/30374710

 

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-- © Copyright The Nation Thailand 2019-08-14
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32 minutes ago, webfact said:

As for the plan to buy 38 new aircraft worth Bt156 billion, it needs to be reconsidered because the government has insisted that the funding for the purchase must come from the company, he said.

Of course they have, now that they are rumored to be on the brink of insolvency, scrounging around for money wherever they can find it, often through new taxes.

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14 minutes ago, Oziex1 said:

Any talk of revising the business model that has created this situation? 

Oh come on. You know better than to ask a rhetorical question like that! LOL

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2 minutes ago, RotBenz8888 said:

Burkina Faso might look in to it 

Burkina Faso airlines has an efficient service to Abidjan ( i use it monthly) why would they want caste off aircraft that doesn't suit their operational requirements. there is a surplus of unwanted aircraft globally so Thai better rethink the non existent strategy.

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8 minutes ago, legend49 said:

Burkina Faso airlines has an efficient service to Abidjan ( i use it monthly) why would they want caste off aircraft that doesn't suit their operational requirements. there is a surplus of unwanted aircraft globally so Thai better rethink the non existent strategy.

Ok, how about Haiti? 

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But they keep telling us Tourists are coming, The Baht is not hurting businesses.

Yes keep waiting for high season to come to pay for you 6.5 billion loss good luck with that, And the cutting of policy interest rate by 0.25% will not help one iota.

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Unlike many other things in this country - aviation is NOT restricted to "Thai Only - no alien". 
 

The loss accounts to THB 35 million a day or almost THB 1.2 million every hour, 24/7. 

Get all those clowns out of those fancy offices, review the employment conditions, the fleet compatibility and start talking to your domestic neighbours (FD, PG, DD, SL etc.) and regional competitors about making all this as lean as 30 years ago. 

Everything else will not work - but yes, it is unpopular for Khon Thai to admit, that they failed and that they cannot handle it.

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5 hours ago, webfact said:

THAI to lease, sell aircraft to turnaround after big losses in 1H

Iv'e got a better idea. Why not lease Thai Airways lock, stock and barrel. Or better still, sell it for the value of the debts and leases. The directors and senior management have no value and can be written off.

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6 hours ago, webfact said:

The airline will also buy foreign exchange after sustaining losses of 5 per cent when the baht appreciated in the first half of this year compared to the end of last year. 

Incompetence.

For at least the last three years the baht has been considered over-valued, only to worsen with each year.

When one operates an international enterprise that requires a mix of foreign currencies, it's almost SOP to have a foreign exchange hedge. https://en.wikipedia.org/wiki/Foreign_exchange_hedge

It basically smooths out fluctuations in drastic currency value changes with a diverse currency pool, ie., including stable currencies such as the USD.

Even BOT recently urged hedging to counter an unpredictable baht.

https://www.nationthailand.com/business/30374532

The admission that THAI will NOW buy into a foreign exchange hedge means that it negligently failed to do so for the last four years when it had clear signs that such a hedge was required in light of BOT refusing to cut interest rates until recently and THAI continued massive operating losses.

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