Thai Airways faces a “revenue crater” post-pandemic, and solutions are far from straightforward.

Thai Airways Bailout

Even before the pandemic, many analysts considered Thai Airways to be mismanaged, and there have been accusations of political interference and corruption. COVID has only worsened the situation for the flag carrier. In April 2020, the government provided the Airline with a 50 Billion Baht loan guarantee, only to rescind it a week later, instead opting to have the airline file for bankruptcy in May 2020. The press has reported that Thai Airways will sell another 42 jets to help pay off their debt, reducing the total fleet size to 58 aircraft.

Thai Airways flight on runway
Thai Airways fleet had 103 aircraft in 2021, but may soon have half that amount | © Andrea Ongaro / Travel Radar

Hope for the future?

Other factors besides alleged mismanagement have contributed to Thai Airways’ struggles. IBA group senior analyst Finlay Grogan says the crux of the problem lay with the conservative approach to border openings from key markets such as China and Japan, which limit the number of passengers the airline can carry. Another issue is that the government has given traffic rights to Etihad Airways, Qatar Airways and Emirates Airline to take passengers to Europe through their respective hubs. Grogan told AIN that he does not see a once-and-for-all solution for Thai Airways:

IBA’s intelligence platform, InsightIQ, indicates total flight volumes from Thailand over the January-November 2021 period were 77 percent lower than in 2019, with international flights down 86 percent.

“We will be watching liquidity levels closely, with the suspension of Test & Go and limited application of tourism sandboxes further restricting key sources of operating cash flow,”

“The industry will be materially smaller, as fleet rationalization will continue in the short-to-medium term, and, as we have seen elsewhere, simply re-hiring staff at first glimpse of an uptick in demand is not straightforward.



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