Thai Airways International has renewed its effort to obtain permission to buy new aircraft and has even beefed up its hoped-for order.
Whatever Thai's challenges, the airline has generated positive headlines recently. These focus not on its business performance, but on the Cinderella tale of a former Thai flight attendant who married the nation's new monarch, King Vajiralongkorn, just prior to his coronation on 4 May.
The bride’s rise from obscurity to prominence and the suddenness of the wedding surprised Thailand's royal watchers - and added a dash of romance to the start of the new King's reign.
Arguably less surprising is another story, carried by the Bangkok Post, in which the carrier's president, Sumeth Damrongchaitham, says Thai still hopes to gain cabinet clearance for a much-needed fleet upgrade. The government still has majority ownership of Thai, with a 51% stake.
The 6 May report suggests the airline is looking to order or lease up to 38 narrowbody and widebody jets. The timing coincides with the conclusion of the country's long-awaited national elections. The conclusion of the polls should presage a period of stability in which Thailand's military junta, which predictably won the majority of seats and the premiership, may be willing to approve Thai’s Bt156 billion ($4.9 billion) plan.
If approved, within five years 31 new jets would replace existing aircraft. A second phase would see seven additional aircraft enter the fleet.
While Thai’s dreams of a new fleet have been on the cards for years, the 38-aircraft number marks a significant increase from the 22-23 jets the carrier had hoped to have approved previously. The earlier fleet plan called for one-third of the jets to be widebodies, and two-thirds to be narrowbodies. It is not clear if this ratio will be retained for the upgraded plan.
Thai's broader turnaround plan, which also touches on network development and reducing costs, has been on the table since 2015. Thai did not respond to requests for more details.
What is clear is that Thai does need to recapitalise its fleet. Cirium's Fleets Analyzer shows that the airline has 76 in-service widebodies of six types.
It operates seven Boeing 747-400s, 32 777s of four variants, six 787-8s, and two 787-9s. From Airbus, it operates 15 A330-300s, 12 A350-900s, and six A380s.
The 787 fleet, however, continues to be plagued by issues with its Rolls-Royce Trent 1000 engines. Fleets Analyzer shows at least four of these aircraft in storage. The Bangkok Post story indicates that eight of Thai's aircraft are grounded, but does not specify which types.
While the 787s and A350s are new, at least 25 aircraft are probably in need of replacement. Most urgently, the carrier's seven 747-400s are an average of 19.7 years old. And apart from 14 777-300ERs with an average age of five years, the average age of the 18 "Classic" 777s is 17.6 years.
Thai Smile is in somewhat better shape, with 20 A320ceos averaging 5.3 years old. Fifteen of the aircraft are leased and five managed directly by Thai. Still, an infusion of more modern narrowbodies would improve fuel efficiency and allow the commencement of long, thin routes to key North Asian markets such as Japan.
While Thai Airways International's need is as clear as ever, several factors may give the country's leaders pause for thought. Political uncertainty has slowed Thailand's economy. In the first quarter, the Bank of Thailand noted several challenges, including slowing exports, weaker private investment, and a marginal contraction in foreign tourists – particularly those from China.
More specifically, the cabinet may balk at Thai's swinging to a 2019 operating loss of Bt9 billion from a Bt2.9 billion operating profit a year earlier. Although revenue rose by 3.9% year on year to Bt200 billion, expenses grew by 10% to more than Bt208 billion. Higher fuel prices, as well as increased aircraft leasing, maintenance, and depreciation charges all conspired to push costs up.
The cabinet may also consider the challenges facing peers such as Garuda Indonesia, Malaysia Airlines and Philippine Airlines, all of which continue to struggle with rampant low-cost competition on international and local routes, as well as various structural costs. Less sentimental types could even conclude that perhaps governments should stay out of the airline game.
Thai clearly needs a fleet refresh, but fairy tale endings are rare enough with people – and even rarer with airlines.