Thai Airways will keep some old jets instead of selling as flight demand rises

BANGKOK, Nov 10 (Bloomberg): Thai Airways International PCL is bringing back almost half a dozen aircraft originally put up for sale in an effort to revive flights more quickly amid buoyant demand.

The global air travel recovery from Covid has put a squeeze on newer planes that are available on the open market, Chairman Piyasvasti Amranand said in an interview at the airline’s headquarters in Bangkok Wednesday. As a result, the carrier is struggling to find capacity available on operating lease, prompting Thai Airways to hold onto its own aircraft, he said.

"It’s not all that easy now, the market is changing -- to be getting new or second-hand leasing of wide-bodies or narrowbodies,” the chairman said, speaking ahead of the carrier hosting of the Association of Asia Pacific Airlines annual meeting on Nov. 10-11, which counts Singapore Airlines Ltd. and Cathay Pacific Airways Ltd. among its 14 members.

Three Airbus SE A330s and two Boeing Co 777-200ERs will return to service early next year, joining four new A350s that Thai has already secured.

As part of the restructuring plan, the state-controlled national carrier planned to add a total of 10 wide-bodies next year and a further eight in 2024. The airline has 61 aircraft in its fleet right now, including 20 for its low-cost unit Thai Smile, down from around 100 previously.

Thai Airways is the midst of a court-monitored debt restructuring, having already undertaken painful cuts which saw it eliminate half of its workforce and 40% of its fleet.

As the airline’s president between 2009-2012, Piyasvasti is no stranger to Thai Airways or its woes, having overseen a debt restructuring at the airline at the time.

The Asian carrier has already sold 12 Boeing 747s, and five Airbus A340s, and is in the processing of selling 4 more of the latter. It has also returned a dozen A330s.

Thai Airways is also mulling temporarily bringing back some of its six Airbus A380s, the out-of-production double-decker model, from 2024 to fill a gap in demand as it waits for newer, more efficient aircraft to be delivered later in the decade.

The airline is set to show improvement in its financial performance at the operating-profit level when it unveils its third-quarter results on Nov. 11, thanks to higher ticket prices. Thai Airways is expected to hit 60% of its pre-pandemic revenue by the end of this year, Piyasvasti said, and it could recover to a high of 90% by the end of 2023, even with the reduced fleet.

The reopening of Thailand’s borders and those of countries including Japan in the last month has bolstered the airline’s reserves to about 32 billion baht from a low of 6 billion baht. As part of the airline’s efforts to bolster its finances, it plans to issue new shares by next year to raise about 25 billion baht, the chairman said.

"I think I would like to see it come not too late because things are improving, financial results are looking good, it would be a good opportunity to do it,” Piyasvasti said. - Bloomberg