Thai Airways’ July progress report reveals a promising outlook for Thailand’s flag carrier, which expects to exit its financial rehabilitation plan earlier than expected. The airline’s revenue has shot up due to increased passenger traffic, but cutting costs, selling stock, and chasing debts have been Thai Airways’ secrets to getting back on track.
After improving its performance, Thai Airways submitted a petition to the Central Bankruptcy Court on July 1st seeking to revise the airline’s current rehabilitation plan, which was acknowledged yesterday by government spokesperson Thanakorn Wangboonkongchana.
According to the report, the airline has 14 billion baht in net cash reserves as of June 30. As a result, Thai Airways may need funding of 12.5 billion baht, instead of 50 billion baht as permitted under the restructuring programme.
Thai’s revenue from passenger traffic has increased significantly, with the average number of passengers using the airline hitting 12,654 per day in recent months. Compared with January this year, passenger traffic has increased sixfold.
But cutting costs in every department is how Thai Airways has built up its cash reserves. Thai has reduced its costs by an enormous 73%, from 29.4 billion to 7.9. billion baht per year.
The airline has cut operating costs by 8.5 billion baht by reducing the types of aircraft in its fleet from nine to four. The airline has sold 11 Boeing 737-400s, an Airbus 340-500, and 4 Airbus 340-600s, with a total of 18 more aircraft in the process of being sold. In total, the overall fleet has been reduced to a mere 43 aircraft.
Maintenance costs have also been reduced by 4.5 billion baht per year.
Thai Airways has also been chasing up the Royal Thai Air Force and Royal Thai Police to repay overdue debts to drive cash reserves upwards.
The entrepreneurial airline has even made 9.5 billion baht from the sale of non-core business opportunities, such as auctioning off merch and aeroplane seats via its Facebook page, TG Warehouse Sale. The airline also leased out space in its head office to make money.
Now that Thailand’s travel restrictions have almost completely gone, the airline only expects things to get better from here. Thai’s executive vice president for commercial Nond Kalinta predicts…
“We believe this year’s high season will see the highest number of passengers in the last 2 years. The airline expects 4.48 million passengers for the whole year and a total income of 80 billion baht thanks to the lifting of travel restrictions for foreigners since July 1.”
Thai Airways also plans to bring back older jets into use. The airline will bring 3 A330-300S aircraft and 2 Boeing 747-400ERs. The reactivated planes will be used on high-demand routes to South Korea, Singapore, and Japan.
SOURCE: Thai PBS 15.July 2022