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Thai Airways

Thai Airways International Public Company Limited, trading as THAI, is the flag carrier airline of Thailand. Formed in 1988, the airline has its corporate headquarters in Vibhavadi Rangsit Road, Chatuchak District, Bangkok, and primarily operates out of Suvarnabhumi Airport. THAI is a founding member of the Star Alliance. The airline is the largest shareholder of the low-cost carrier Nok Air with a 39 percent stake, and it launched a regional carrier under the name Thai Smile in the middle of 2012 using new Airbus A320 aircraft.

From its hub at Suvarnabhumi Airport, THAI flies to 80 destinations in 37 countries, using a fleet of more than 90 aircraft. The airline was once the operator of two of the world's longest non-stop routes between Bangkok and Los Angeles and New York City, but due to high fuel prices, the withdrawal of aircraft, luggage weight limits and rising airfares, the airline abandoned all non-stop US services in 2012 indefinitely. As of 2013, services between Bangkok and Los Angeles were served via Incheon International Airport near Seoul, however, it ended its service to the US on 25 October 2015. THAI's route network is dominated by flights to Europe, East Asia, and South/Southwest Asia, though the airline serves five cities in Oceania. THAI was the first Asia-Pacific airline to serve London Heathrow Airport. Among Asia-Pacific carriers, THAI has one of the largest passenger operations in Europe.

THAI is an official sponsor of Bangkok United, Reading F.C., and Red Bull Racing.

Beginnings

THAI Airways has its origins in 1960 as a joint venture between Scandinavian Airlines (SAS), which held a 30 percent share of the new company valued at two million Thai baht, and Thailand's domestic carrier, Thai Airways Company. 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 percent of staff based in Thailand in 1987. The carrier's first revenue flight was on 1 May 1960, operating a Douglas DC-6B. Flights were operated to nine overseas Asian destinations from Bangkok.

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.

On 1 April 1977, after 17 years of capital participation by SAS, the Thai government bought out the remaining 15 percent of SAS-owned shares and THAI became an airline owned by the Thai government. In 2016, the company is 51 percent owned by the Thai Ministry of Finance. Forty-seven percent of its shares trade on the Stock Exchange of Thailand.

1980s and 1990s: merger with Thai Airways Company

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. 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.

In 1997 Thai Airways planned a privatization program, 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.

2000s: Airline brand renewal and financial difficulties

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 services 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 percent 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. 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. It has since received its first A380s and commenced service to Hong Kong on 6 October 2012.

2010s: Fleet renewal and expansion

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 a significant aircraft fleet renewal and an upgrade of existing services. THAI has since placed orders for a number of aircraft, including the cost-efficient 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 last 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 operate 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". THAI hopes 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.

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.

On 1 December 2015, the United States 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."

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.

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 reconstruction plan, THAI announced to commence three-weekly Tehran service and resume Moscow service from October and November 2016 respectively. The airline also considered to return to the United States using Boeing 787-9 by 2017. However, Charamporn Jothikastira, THAI president, turned down the possibility of returning to Los Angeles due to massive loss in the past. Instead, THAI eyed other cities such as San Francisco and Seattle. While Thai Smile, its subsidiary, is planning for new regional routes such as Cebu, Medan, Surabaya, Chandigarh, Shantou and Tianjin.

In August 2016, THAI introduced new route network management system. Following the system, many flight schedules were changed to match each other, allowing intercontinental passengers to transit via Bangkok more conveniently. THAI planned preliminary to adjust 13 routes schedules mainly in Japan, Australia and India. The routes that have been announced are Perth and Brisbane.

On 23 September 2016, Thai Smile,THAI's subsidiary has announced 4 new services to Gaya, Varanasi, Jaipur and Lucknow in India marking the expansion of THAI's network in regional market.

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

Rolls-Royce engine procurement

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. Rolls-Royce admitted to the charge and agreed to pay penalties. The illicit payments of US$36.38 million took place between 1991 and 2005. Bribes were paid in three tranches:

  • 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 powers to cut through red tape in the investigation of the Rolls-Royce bribery scandal. 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."

Fleet

As of January 2017, the mainline Thai Airways fleet consists of the following aircraft:

Aircraft In Service Orders Passengers Notes
F C Y Total
Airbus A330-300 17 — — 36 263 299 Two older 305-seaters are used only in domestic routes; Three to be retrofitted
HS-TEL painted in Star Alliance Livery
42 305
Airbus A350-900 2 10 — 32 289 321 13 additional options and a further 10 purchase rights.
Four are being purchased directly from Airbus, while the other being acquired under lease agreements from CIT Group.
Airbus A380-800 6 — 12 60 435 507
Boeing 737-400 1 — — 12 137 149
Boeing 747-400 10 — 10 40 325 375 To be phased out and replaced by 2020.
9 374
Boeing 777-200 6 — — 30 279 309
Boeing 777-200ER 6 — — 30 262 292 To be retrofitted with 1-2-1 configuration lie-flat business class seats, which also includes an IFE upgrade and Wi-Fi installation.
Boeing 777-300 6 — — 34 330 364
Boeing 777-300ER 14 — — 42 306 348
Boeing 787-8 6 — — 24 240 264 Leased from AerCap. To be refurbished in mid-2017, which includes the addition of crew bunks and Wi-Fi installation.
Boeing 787-9 — 2 — 30 268 298 Leased from ILFC. To be delivered in 2017.
Total 74 12
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