Thai Airways has begun a sweeping five-year fleet replacement programme which will see nearly half of its 73 aircraft put up for sale and replaced by US$5 billion worth of new aircraft in a bid to boost productivity by 8.5 per cent and dramatically improve fleet economics.
Chatu Mongkol Sonakul, permanent secretary of the Thai Finance Ministry which owns 93 per cent of the carrier, says the move will save up to $250 million annually. Two B737-200s have already been sold to Pakistan's second carrier, Shaheen Air International, for $16.7 million and six B747-200s to Langdon Asset Management for $123 million, the first of an expected 31 jets to be discarded.
The purchase of up to 21 new aircraft has won board approval but has yet to be cleared by the government. Thai's profitability has been volatile and high fleet costs are largely to blame.
The fleet mix includes 14 aircraft and 11 engine types - the fleet renewal will cut both figures to six. The carrier had previously ordered a further 20 aircraft.
Thai's first quarter to 31 December saw profits lift 40 per cent to US$70.1 million but the gains were on the back of holiday season traffic and a 5.8 per cent drop in fuel costs.
Fleet rationalisation may go some way to solving the carrier's problems but there is still concern about the renewed influence of the air force in Thai's senior ranks. 'Thai's president, Thamnoon Wanglee, has to deal with that issue. All of the airline's problems will not be solved simply by selling and buying jets', says one informed Japanese analyst.
Tom Ballantyne
Source: Airline Business