Thai Airways

Thai Airways has its origins in 1960 as a joint venture between Scandinavian Airlines (SAS), which held a 30 per cent share of the new company valued at two million Thai baht, and Thailand's domestic carrier, Thai Airways Company (Thai: เดินอากาศไทย). The purpose of the joint venture was to create an international wing for the domestic carrier Thai Airways Company. SAS also provided operational, managerial, and marketing expertise, with training assistance aimed at building a fully independent national airline within the shortest possible time. Thai nationals, through training and experience, were gradually able to assume full managerial responsibility and the number of expatriate staff duly decreased, with expatriates accounting for less than one per cent of staff based in Thailand in 1987.[15] The carrier's first revenue flight was on 1 May 1960. Flights were operated to nine overseas Asian destinations from Bangkok.

A Thai McDonnell Douglas DC-10 at Frankfurt in 1977.

The airline's first intercontinental services using Douglas DC-8s started in 1971 to Australia, and then to Europe the following year. A number of the larger Douglas DC-10 wide-body tri-jet was acquired in the later 1970s. Services to North America commenced in 1980.[15]

On 1 April 1977, after 17 years of capital participation by SAS, the Thai government bought out the remaining 15 per cent of SAS-owned shares and Thai became an airline owned by the Thai government.[15] As of 2019, the company is 51 per cent owned by the Thai Ministry of Finance.[4] Forty-seven per cent of its shares trade on the Stock Exchange of Thailand.[16]

On 1 April 1988, then-Prime Minister Gen. Prem Tinsulanonda, in seeking to have a single national carrier, merged the international and domestic operations of the two companies to form the present company, Thai Airways International.[15] On 25 June 1991, the new Thai listed its shares on the Stock Exchange of Thailand and offered them to the public. The Thai public offering of shares is the largest ever undertaken in the country.[15]

In 1997 Thai Airways planned a privatization program,[17] the first in Thai history.

On 14 May 1997, THAI, along with Lufthansa, Air Canada, SAS, and United Airlines, founded the world's first and largest airline alliance, Star Alliance.

Thai Airbus A300, Phuket Airport (2008)

An Airbus A380-800 (registered as HS-TUF) of Thai Airways International.

Throughout the 2000s (decade), Thai aggressively continued its route network expansion with new services to Chengdu, Busan, Chennai, Xiamen, Milan, Moscow, Islamabad, Hyderabad, Johannesburg (later suspended) and Oslo.

Using the Airbus A340-500s it acquired in 2005, Thai commenced non-stop flights from Bangkok to New York, its first non-stop services to North America. The airline later converted existing one-stop service (via Tokyo) to Los Angeles into non-stop services using the same aircraft type. Citing very high fuel costs, Thai discontinued the New York service in July 2008, even though the airline had been able to fill 80 per cent of the seats. The service to Los Angeles was again reverted to one-stop service via Seoul on 1 May 2012, leaving the airline without a non-stop service between Thailand and North America. The A340s used have been phased out using the Boeing 777-200ER for the Bangkok–Seoul–Los-Angeles route. Although the previous A340 used for non-stop services was not subject to ETOPS, the phasing in of the 777 with one-stop service (with the 330 minute rule) will be indefinite for years to come; the airline has no plans to pursue newer North America destinations (e.g., Houston, TX, USA) or purchase the Boeing 747-8 for trans-Pacific routes since Thai Airways is operating the Airbus A380.

In 2006, THAI moved its hub operations to the new Bangkok Suvarnabhumi Airport. Coinciding with the arrival of new aircraft during the mid-2000s, as well as its new hub airport in Bangkok, the airline launched a brand renewal by introducing a new aircraft livery, new aircraft seating, and revamped ground and air services.

The 2000s (decade) also saw Thai expanding its route network beyond its Bangkok hub. The airline launched non-stop flights from Phuket to Tokyo–Narita, Seoul–Incheon and Hong Kong.

During the late-2000s, Thai's aggressive growth was hampered by a combination of internal and external factors, including a spike in fuel prices, domestic political conflict in Thailand, and the global economic crisis of the late-2000s. In 2008, after achieving profitability for the previous 40 years, THAI recorded a loss for the first time in its history of around 21 billion baht (US$675 million). The airline cited high fuel costs and Thailand's political situation.[18] As of Q2 2009, after a series of restructuring initiatives, including a two-year deferral of its Airbus A380 deliveries, the carrier returned to a net profit of 2.5 billion baht.[19] It has since received its first A380s and commenced service to Hong Kong on 6 October 2012.

While celebrating its 50-year anniversary in 2010, Thai, spearheaded by Piyasvasti Amranand, its president and a former energy minister, charted new plans for the airline's future, including aircraft fleet renewal and an upgrade of existing services. Thai has since placed orders for a number of aircraft, including the Boeing 787 and Airbus A350, and it has also launched a refurbishment of its Boeing 747 and 777 cabins. Mindful of rising fuel costs, the airline has now phased-out the most inefficient aircraft, including its Airbus A340-500s. The airline took delivery of its first Airbus A380 aircraft in the second half of 2012, intending to eventually deploy the aircraft on its core European routes.

THAI has also resumed its network expansion with the resumption of flights to Brussels, in addition to a new non-stop flight from Stockholm and Copenhagen to Phuket. At the same time, the Greek debt crisis caused Thai to suspend its services to Athens.

As part of THAI's broader growth strategy in the region, THAI launched a regional carrier with light-premium services, Thai Smile which operates the narrow-bodied Airbus A320-200 on regional and domestic routes. The new airline initiated commercial operations in July 2012, after its first A320s were received.

Thai expects to be the first carrier in Asia to fly commercial flights using biofuels. The carrier launched the initiative with experimental flights in December 2011 as part of its Corporate Social Responsibility program, otherwise known as "Travel Green". Thaihopes to stimulate sustained biofuel production in Thailand by working with Thai government agencies and regional corporate partners, such as PTT Public Company Limited. The effort aims to reduce carbon dioxide emissions in regional air travel as well as position Thailand to be the "bio hub" of Asia.[20]

All Thai airlines are presently (April 2015) under safety review following a negative audit from the International Civil Aviation Organization (ICAO). The general implications and possible effect on code share flights are reviewed by Watson, Farley and Williams.[21]

On 1 December 2015, the US Federal Aviation Administration (FAA) announced their reassessment of the safety rating for Thailand, downgrading it from a Category 1 to Category 2 country. The FAA stated, "U.S. and Thai aviation officials have a long-standing cooperative relationship and both our countries work continuously to meet the challenge of ensuring aviation safety. A Category 2 International Aviation Safety Assessment (IASA) rating means that the country either lacks laws or regulations necessary to oversee air carriers in accordance with minimum international standards, or its civil aviation authority—a body equivalent to the FAA for aviation safety matters—is deficient in one or more areas, such as technical expertise, trained personnel, record-keeping, or inspection procedures. With a Category 2 rating, Thailand's air carriers can continue existing routes to the United States but they won't be allowed to establish new routes to the United States."[22]

The European Aviation Safety Agency (EASA) declined to blacklist any Thai carriers following a review of certain carriers in November 2015. Thai later received third country operator (TCO) certification from the EU, effective 15 December 2015, authorizing the carrier to continue flying to the EU for the foreseeable future.[23]

In July 2015, Thai entered a promotional deal with South Korean pop group Girls' Generation, including an appearance in the music video for their song "Party". Also in July 2015, Thai announced the planned cancellation of service to Los Angeles after 25 October 2015, marking the end of US service.

In June 2016, as a result of its restructuring plan, Thai announced it would commence thrice-weekly Tehran service. The service ended on 28 February 2018[24] and resumed Moscow service from October and November 2016 respectively.[25] The airline also considered a return to the US using Boeing 787-9 by 2017. However, Charamporn Jothikastira, THAI president, turned down the possibility of returning to Los Angeles or New York City due to losses in the past. Instead, Thai considered other cities such as San Francisco and Seattle.[26][27] While Thai Smile, its subsidiary, is planning for new regional routes such as Cebu, Medan, Surabaya, Chandigarh, Shantou and Tianjin.[28]

In August 2016, Thai introduced new route network management system. Following implementation, many flight schedules were synchronized, allowing international passengers to transit via Bangkok more conveniently. Thai planned to adjust 13 routes schedules mainly in Japan, Australia, and India.[29] The routes that have been announced are Perth and Brisbane.[30]

On 23 September 2016, Thai Smile, Thai's subsidiary announced four new services to Gaya, Varanasi, Jaipur, and Lucknow in India marking the expansion of Thai's network in regional market.[31]

In the fourth quarter of 2016, Thai Smile vowed to resume its suspended routes and Thai's terminated regional routes which are Da Nang,[32] Kota Kinabalu,[33] Luang Prabang[34] and Mandalay. Also the airline has considered launching new services to Hangzhou and Zhengzhou.[35]

In January 2017 a four-year investigation by the UK's Serious Fraud Office (SFO) came to light. It determined that aircraft engine-maker Rolls-Royce had paid bribes to "...agents of the Thai state and employees of Thai Airways..." in order to secure orders for the Rolls-Royce T800 engine for its Boeing 777-200s.[36] Rolls-Royce admitted to the charge and agreed to pay penalties.[37] The illicit payments of US$36.38 million took place between 1991 and 2005. Bribes were paid in three tranches:[38]

• 1 June 1991 – 30 June 1992: Rolls-Royce paid 660 million baht (US$18.8 million)
• 1 March 1992 – 31 March 1997: Rolls-Royce paid US$10.38 million
• 1 April 2004 – 28 February 2005: Rolls-Royce paid US$7.2 million

The government rejected calls for Prime Minister Prayut Chan-o-cha to use his Section 44[39] powers to cut through red tape in the investigation of the Rolls-Royce bribery scandal.[38] Response from the Thai government's National Anti-Corruption Commission to information provided by the SFO, is said to be "tepid" and "...could be more embarrassing than the scandal itself."[40]

Thai Airways codeshares with the following airlines:[41]

As of October 2019, Thai's accumulated debt amounted to more than 100 billion baht, prompting a deputy transport minister to question "...how serious the airline's executives were in dealing with the worsening financial situation."[43] Thai reported a net loss of 4.68 billion baht in the third quarter of 2019 and a 10.91 billion baht net loss for the first nine months of 2019. Thai's president lamented that, "...such losses were normal for airlines amid fierce competition and price dumping to win customers,"[44] a statement contradicted by the performance of other airlines in the region such as VietJet Air.

In 2019, Thai's net loss widened to 12.2 billion baht, up from Thai's net loss of 11.6 billion baht in 2018 and 2.11 billion in 2017.[45][46]

For calendar year 2017, Thai posted revenues of 190,535 million baht, net income of (2,072) million baht, and total assets of 280,775 million baht.[47] In the first half of 2018, Thai reported a net loss of 381 million baht.[48]

Calendar year:	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017
Turnover (m baht)	202,606	163,875	184,270	194,342	216,743	207,711	203,889	192,591	181,446	191,946
Net Profit / Loss (m baht)	−21,379	7,344	14,744	−10,197	6,229	−12,047	−15,612	−13,068	15	−2,072
Employees			25,884	25,848	25,412	25,323	24,952	22,864	21,998	22,370
Passengers (m)	18.7	18.5	18.2	18.4	20.6	21.5	19.1	21.2	22.2	24.6
passenger change year-on-year		1.2%	1.7%	1.3%	12.1%	4.3%	11.2%	11.%	4.7%	10.3%
Passenger load factor (%)	68.2	65.8	73.6	70.4	76.6	74.1	68.9	72.9	73.4	79.2
Aircraft (at year end)	89	91	90	89	95	100	102	95	95	100
Notes/sources	[49]	[49]	[50]	[50]	[51]	[6][51]	[6][51]			[52]

At the commencement of 2014, Thai was subject to a rumor that the company would declare bankruptcy in May 2014.[53] Listed on the Thai stock exchange, the company is a state enterprise in which the finance ministry holds a stake of up to 51 per cent. In a statement to the media, Chokchai Panyayong, the airways' senior executive vice-president and acting president, stated: "Thai has never once defaulted. Despite its loss in the third quarter of last year, the company still has high liquidity and has a clear plan for debt repayment."[53] He further explained that the carrier's loss of 6.35 billion baht in the third quarter of last year was the result of the company's unsuccessful plan to attract more customers.[53] Thai's financial loss for 2014 was reported to be at 15.6 billion baht (US$479 million), 3.6 billion baht higher than the previous year.[6][54] Thai blamed declining tourist arrivals from North Asia owing to political unrest in Thailand during the year, but capacity figures from Flightglobal's Innovata Network Data service suggest that Europe was probably an even bigger drain on the bottom line during the year.[55]

Thai's new management team has set itself the goal of returning to "sustainable profitability" by 2022 as well as joining the ranks of the world's top five airlines. The centerpiece of its turnaround plan is its proposed 100 billion baht purchase of 23 new aircraft.[48] THAI's chairman pointed to its aging fleet as being expensive to maintain. THAI's 89 aircraft have an average age of 9.3 years compared with competitor Singapore Airlines average age of 7.6 years. Thai's chairman said the company has not yet determined "...what aircraft and type we need to buy because we have yet to finalize financing."[48]

Thai's recovery plans include teaming up with state enterprises Airports of Thailand PCL (AOT) and Krung Thai Bank (KTB) to help drive the carrier to profitability. The team's "first task" is to deliver more tourists to 55 "second-tier" provinces. The Tourism Authority of Thailand (TAT) will assist the team by creating a new campaign, "More Local", to drive tourism to less visited corners of the nation. AOT, which operates Thailand's six international airports, will invest 220 billion baht in infrastructure to increase airport capacity from 2018's 80 million passengers to 185 million in ten years. KTB's contribution to the effort consists of creating new payment solutions for tourists and ramping up travel promotions.[56]

Political interference, corruption and abuse of authority have been persistent issues in Thai's management.[57] Speaking at the World Economic Forum on East Asia, former president Piyasvasti Amranand, who had been abruptly dismissed in May 2012, cited Thai's procurement of A340-500s (three of which had since been grounded) as examples of mismanagement influenced by corruption and political meddling, resulting in operational losses.[58]

As of March 2020, the Thai Airways fleet consists of the following aircraft:[59]

THAI's fleet development plans, as of December 2011,[61] for the period 2012–2022 is in three phases:

• 2012: Phase-out of 11 aging aircraft, delivery of 12 government-approved aircraft.
• 2013–2017: Phase out of 35 aging aircraft, delivery of 11 aircraft that have already been approved, and acquisition of 33 new aircraft, including 26 next-generation wide-bodied aircraft and 20 Airbus A320s.
• 2018–2022: Phase out some Boeing 747-400s and some Boeing 777s and acquisition of 15 next-generation wide-bodied aircraft to replace them. Two Boeing 747-400s (HS-TGF and HS-TGG) to remain in service.

On 13 June 2011, Thai's Board of Directors announced it would purchase 15 aircraft and acquire the remaining 22 on operating leases. The purchased planes include 14 Boeing 777-300ERs, to be delivered in 2014 and 2015, four Airbus A350-900s (2016 and 2017). The leased planes include six 787-8s and two 787-9s from US lessor International Lease Finance (ILFC). The 8 series will be delivered in 2014 and 2015, while the 9 series will be delivered in 2017. In addition, Thai will lease six A350-900s from Aviation Lease and Finance, to be delivered in 2017, and two A350-900s from CIT Aerospace International, which will deliver the aircraft in 2016. The airline will also lease six A320-200s from RBS Aerospace International, to be delivered in 2012 and 2013. All the operating leases have terms of 12 years each.[62][63]

On 20 January 2016 Thai Airways International PCL announced plans to postpone taking delivery of 14 planes for three years to reduce operating costs as the national airline restructured. The 14 planes include 12 Airbus A350s, two of which were due to be delivered in 2016, and two Boeing 787s.[64]

On 12 February 2016 Thai Airways announced it will continue to ground 10 Airbus A340s it had not been able to sell because flying the four-engine planes is not cost-effective, even after fuel prices plunged more than 40 per cent in the previous year. Besides trying to offload the planes, which were used previously for long-haul destinations such as Frankfurt, the money-losing airline has cut routes and sold assets to bolster its balance sheet and operations.[65]

In 2017, Thai took delivery of seven new aircraft and decommissioned two leased Airbus A330-300s bringing its active fleet to 100 as of 31 December 2017.[52]

• Historically, THAI Airways had Boeing Customer Code D7. For example, a Boeing 747-400 aircraft that the airline ordered directly from Boeing Commercial Airplanes was coded Boeing 747-4D7. Since the introduction of the Boeing 787, Boeing no longer uses customer codes.

Thai Technical is certified internationally by the Federal Aviation Administration, the Joint Aviation Authorities,[67] the European Aviation Safety Agency Part-145 Maintenance Organisation,[68] and the Japan Civil Aviation Bureau for facilities at Don Mueang International Airport and Suvarnabhumi Airport.[69] It has also received its Requalifier Identification Certificate from the United States Department of Transportation[70] for its operations at U-Tapao International Airport and Suvarnabhumi Airport.[71]

It is certified domestically by the Department of Civil Aviation (Thailand) for all three of its facilities in Thailand.[71]

On 27 February 1998, the Department received its ISO 9002 certification from Bureau Veritas Quality International,[72] with ISO 14001 certification granted by the same agency on 16 March 2001.[72]

Thai's Royal First Class seats, manufactured by B/E Aerospace, were introduced with the arrival of the Airbus A340-600. These seats are also available on selected Boeing 747-400 aircraft. A new version of Royal First Class seating in a suite or enclosure configuration is available on Thai's Airbus A380-800 aircraft and select Boeing 747-400 aircraft since the 2012 refurbishment.[76]

Thai's Royal Silk Class seats have been installed on all Thai aircraft. The angled shell design seats have 150 to 160 cm (58 to 62 in) of pitch and a width of 51 to 55 cm (20 to 21.5 in). Prior to refurbishment, Royal Silk seats on 777-300ERs are sold as premium economy class seats on Scandinavian routes and Moscow. A new set of Royal Silk seats are available on THAI's Airbus A380-800s, Boeing 777-300ERs, Boeing 787-8s, and Airbus A350-900s. After the delivery of the new 787-9s to THAI, the Zodiac Cirrus or Reverse Herringbone seats are now available on board the new aircraft.[77]

Thai's Economy Class offers between 81 and 86 cm (32 and 34 in) seat pitch depending on the aircraft type. Personal screens with AVOD are present on the Airbus A380-800, Airbus A330-300, Airbus A350-900, Boeing 747-400, Boeing 777 (200, 200ER, 300 and 300ER), Boeing 787-8/-9 aircraft.[77]