A Thai Airways B777-200 aircraft
A Thai Airways B777 turning into a runway (Photo: Faisal Akram / Flickr)
Thai Airways managed to pull off the impossible

Thai Airways recently managed to turn around its spiraling debt to posting its best-ever profit in its history.

With the help of a bankruptcy court, Thai Airways recently managed to turn around its spiraling debt to posting its best-ever profit in its history. What was once an impossible task, it managed to overcome by sheer will and management finally listening to the problem.


  • How the airline almost went bust
  • The bitter, hard lesson
  • Light at the end of the tunnel

How the airline almost went bust

In order to understand how Thai Airways almost went bust, we need to look back at some of the questionable decisions made by them.

During the era where every airline is offering non-stop flights to the USA, Thai Airways purchase 10 Airbus A340-500 and A340-600 from Airbus themselves in 2004 and 2005. There was only one problem. At that time, both Airbus and Boeing each have twin widebody aircraft such as the A330 and the B777 respectively, with the latter offering a longer-range version, the B777-200LR which could easily reach the USA from Bangkok.

In an era where twin-engine beneficial cost outweighs quad-engine in terms of fuel burn, it was interesting to note that the USA direct flights went ahead despite objection from the Office of the National Economic and Social Development Council over the quad-engine gas-guzzling aircraft which the airline acquired.

From the get-go, it was a loss-making route, with losses totaling 12 billion baht within two years.

I became intrigued by their decision to purchase the A380 superjumbo when its Asian counterpart such as Singapore Airlines, Korean Air, Asiana, China Southern, and to a lesser extent, Malaysia Airlines had the money to purchase the aircraft which was priced at over US$400 million dollars (before discounts) and wondered how Thai Airways could afford the aircraft while incurring losses year after year.

In 2017, a bribery scandal broke out in which Rolls Royce admitted that it had bribed officials in Thailand almost 663 million baht in favor of Thai Airways choosing Rolls Royce T800 engines over their competitors for their Boeing 777-200 fleet dating back from 1991.

The bitter, hard lesson

With a spiraling debt increasing year on year, Thai Airways knew they were running out of options. It was now or never.

Its eventual downfall was attributed to the following reasons, based on my personal opinion:

  • Thai Airways’ complicated, diverse aircraft fleet such as the Airbus A330, A340, A350, A380 and Boeing 747, 777 and 787
  • Weak bargaining power with planemaker/lessor as each fleet purchase/leasing were usually small
  • Mismangement of the company in overall
  • Not profit-driven and heavily reliant on government support
  • Its debt liability accelerated by COVID-19 pandemic
  • Years of operating loss-making routes

In 2020, Thai Airways filed for debt restructuring as its debt soared to almost $410 billion baht. What came after were some of the most painful decisions that it had to make such as retrenchment and early retirement of staff, putting buildings, aircraft parts, simulators, and older aircraft up for sale to claw back much-needed capital.

To raise more funds, THAI even ventured out of its comfort zone to open a restaurant and sell dough fried sticks outside its building.

At the same time, the Thai government sold off most of its stake in Thai Airways to become a minority owner, effectively stripping the airline of its state enterprise status.

Looking through the Thai Aircraft Trading website, the entire Boeing 747-400 fleet is listed as “sold out”. It is highly likely that a company has procured it and either converted it into a freighter or for parting out.

Light at the end of the tunnel

With Thai Airways’ simplification of its fleet to just the Airbus A350, Boeing 777-300ER, and 787, it would save them a lot of money in the long run in terms of maintenance and training, with the future of flying lies predominantly with twin-engine operations.

Recently, it posted a nine-month net profit of 51.12 billion baht, mostly due to its debt restructuring while its operating revenue continues to suffer due to the pandemic.

Competent management will hopefully regain the good old days of Thai Airways and their warm hospitality which I have experienced a couple of times on board their flight.

THAI’s well-known hospitality starts with a smile from the flight attendant (Photo: Brussels Airport/ Flickr)

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