News Forum - Thai Airways to merge with Thai Smile to ‘reduce losses’

[Thaiger]

Thai Airways is to merge with Thai Smile to “reduce losses.” The plan is expected to be approved by the end of this year. Piyasvasti Amranand, chairman of THAI’s committee overseeing the airline’s rehabilitation, said the restructuring had been on the cards for a while and had always been part of the plan. “A study …

The story Thai Airways to merge with Thai Smile to ‘reduce losses’ as seen on Thaiger News.

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[palooka]

 achieve greater efficiency in human resources and aircraft.

Job losses - but if you want to be lean you have to be mean.

[Soidog]

I don’t know how split Thai Smile was from Thai. If the “merger” is going to save such large amounts, it suggests it operated as a totally separate company from the Baird room all the way through corporate functions such as HR and finance. If that’s the case, then why was that allowed to happen? If that’s not the case then I fail to see how such high savings will be made unless they are cutting routes.

The number of times I’ve been involved with mergers and acquisitions and the sell side claims massive saving opportunities, only to find it’s actually cutting back on services and hence a loss of revenue also. I suspect that’s the case here also?  

[Highlandman]

Sounds good. Looks like they're about to approve the same thing that occurred when Silk Air was merged into its parent, Singapore Airlines. The latter gained narrowbody aircraft such as the B737 and B737 max, which allows Singapore Airlines to service smaller, regional markets for which a wide body wouldn't make economic sense.

THAI is also unique at the moment in that its the only national carrier in the region that doesn't fly domestic routes anymore, doesn't offer a domestic business class [anymore] and offers no flights out of secondary cities. All flights are international to/from Bangkok Suvarnabhumi, with Phuket having been scrapped last August. For a country the size of France, with several secondary cities that have a lot of international passenger traffic, including Chiang Mai and Phuket in particular, this is a very unusual situation.

In Vietnam, several airlines offer wide body domestic service on a number of routes, not to mention there is domestic business class service on both flag carrier Vietnam Airlines and Bamboo Airways.

THAI not being able to offer similar levels of service in Thailand, a more developed market, seems odd and embarrassing to say the least. Before anyone says anything, I realize Thailand doesn't have any secondary cities as large as Ho Chi Minh, but it does have Chiang Mai, which is as big as Da Nang, Vietnam's third largest city. Chiang Mai isn't just an important tourism destination but is also an industrial hub of the north, with food processing, agriculture, education and the medical sector making up the economy.

It also has U-Tapao, which services the industrial heartland of Thailand and should really be able to field many domestic and some international flights full of business travelers, yet the few flights that land there are almost exclusively filled with low budget European, Russian and Chinese vacationers heading to nearby Pattaya.

Anyway, with this merger, THAI will gain more than a dozen narrowbody A320s, which will allow the carrier to service domestic routes once again (and not just Phuket, Chiang Mai and Krabi but more than a dozen domestic cities and even some cross-country pairs not involving Bangkok), regional routes the mainline carrier has pulled out of (such as basically all the Indochina routes and Myanmar, as well as Penang, all of which are currently serviced by Thai Smile) and hopefully also prompt the return of a domestic business class and widebody service between Bangkok and Phuket, Chiang Mai and Krabi.

[Highlandman]

2 hours ago, Soidog said:

I don’t know how split Thai Smile was from Thai. If the “merger” is going to save such large amounts, it suggests it operated as a totally separate company from the Baird room all the way through corporate functions such as HR and finance. If that’s the case, then why was that allowed to happen? If that’s not the case then I fail to see how such high savings will be made unless they are cutting routes.

The number of times I’ve been involved with mergers and acquisitions and the sell side claims massive saving opportunities, only to find it’s actually cutting back on services and hence a loss of revenue also. I suspect that’s the case here also?  

They've cut a large number of routes since the end of Covid restrictions - some of these might be back, but here are a few:

THAI (mainline) has pulled out of ALL domestic services, even Phuket.

THAI (mainline) suspended ALL international services out of Phuket, including services to Sydney (new route that only began in late 2021), Copenhagen (a route that had been operating for many years), Stockholm (ditto), Frankfurt and London. Zurich-Phuket had also been offered for the first time.

Some of these flights were triangular routes with service from Europe to Phuket, returning via Bangkok.

THAI also pulled out of Perth, having briefly operated flights between July and October 2022. Perth-Phuket, Bangkok-Brisbane, Auckland and Moscow haven't been offered since before the borders closed in March 2020, except for repatriation flights during 2020 and 2021. Moscow of course was struck off the flight schedule due to the war in Ukraine and international sanctions.

THAI Smile has taken over all of the mainline carriers services to Penang, Myanmar (Yangon), Cambodia (Siem Reap and Phnom Penh), Vietnam (Ho Chi Minh and Hanoi) and Laos (Vientiane and Luang Prabang). Some of these cities were served by THAI's widebody aircraft such as the A330, at least for some services, prior to Covid. This is no longer the case now, but as THAI's financial position improves, the airline acquires more aircraft and exits bankruptcy due to an improving economic situation, it's hoped that some of these services will once again be serviced by THAI and its predominantly widebody fleet.

[Vigo]

Here we go again. The aviation management consultants have reversed their position again. Maybe they new concept to sell?   It wasn't too long ago that the creation of specialized subsidiary companies was to be the savior of the airlines industries.  There would be hubs, and narrow body aircraft would be transferred to new independent companies which would have new non unionized crews subject to different labour contracts and without the legacy airline costs. Along with the new structure came the unbundling of airfares, with basic airfares and charging for luggage, seat selection , pre-boarding etc. The same genius collective that gave  AF/KLM Group Joon, Hop, cityJet, United - Ted, Delta - Song, Air Canada -  Tango, Jazz  etc. And Thai Thai Smile and spun off Nok, now tells us, bigger is better.

It's amazing what a shortage of aircrew and increased profitability will do.     I just hope I can go back to regaining my opportunity for qualifying flights and spend so that I can  retain Gold status with Star Alliance. it sucks to have lost status since I didn't fly much for the past 2 years.

[Tezza1971]

21 hours ago, Thaiger said:

Thai Airways is to merge with Thai Smile to “reduce losses.” The plan is expected to be approved by the end of this year. Piyasvasti Amranand, chairman of THAI’s committee overseeing the airline’s rehabilitation, said the restructuring had been on the cards for a while and had always been part of the plan. “A study …

The story Thai Airways to merge with Thai Smile to ‘reduce losses’ as seen on Thaiger News.

Read the full story

 

16 hours ago, Highlandman said:

They've cut a large number of routes since the end of Covid restrictions - some of these might be back, but here are a few:

THAI (mainline) has pulled out of ALL domestic services, even Phuket.

THAI (mainline) suspended ALL international services out of Phuket, including services to Sydney (new route that only began in late 2021), Copenhagen (a route that had been operating for many years), Stockholm (ditto), Frankfurt and London. Zurich-Phuket had also been offered for the first time.

Some of these flights were triangular routes with service from Europe to Phuket, returning via Bangkok.

THAI also pulled out of Perth, having briefly operated flights between July and October 2022. Perth-Phuket, Bangkok-Brisbane, Auckland and Moscow haven't been offered since before the borders closed in March 2020, except for repatriation flights during 2020 and 2021. Moscow of course was struck off the flight schedule due to the war in Ukraine and international sanctions.

THAI Smile has taken over all of the mainline carriers services to Penang, Myanmar (Yangon), Cambodia (Siem Reap and Phnom Penh), Vietnam (Ho Chi Minh and Hanoi) and Laos (Vientiane and Luang Prabang). Some of these cities were served by THAI's widebody aircraft such as the A330, at least for some services, prior to Covid. This is no longer the case now, but as THAI's financial position improves, the airline acquires more aircraft and exits bankruptcy due to an improving economic situation, it's hoped that some of these services will once again be serviced by THAI and its predominantly widebody fleet.

Yes, thank you Thai Air for your loyalty to the good people's of Perth and Brisbane in Australia who for years supported your airline only to be slapped in the face with contempt and disrespect. I was a Royal Orchid Gold Card holder, but I won't be renewing my card with Thai Air again, they can go and get rooted. I will now fly with Singapore Airlines and give them my money instead. Don't care if Thai Air come back to Perth, to be honest. you're not welcome.