Thai to sell its A380 fleet

[reader]

From Thai Enquirer

Thai Airways International Plc (THAI) has announced that it was selling its fleet of A380 as it would cost more than a billion Baht each to fix the aircraft that has been lying idle for more than 2-years. The fleet of A380 were grounded after the outbreak of Covid-19 and THAI has a fleet of 8 aircraft.

Globally A380 are being retired as A350 and Boeing’s 787 are starting to replace the 4 engine A380 that consumes a lot more fuel than the A350 and 787
that can fly the same distance but just on 2 engines.

 

 

[omega]

It's really sad, the A380s are great planes - Especially for those who fly economy and could grab one of the more spacious seats that were available on the top deck in some seating plans.

But they were built for an out of date hub and spoke network... still works really well for the Middle Eastern airlines whose home cities are typically not big destinations, but are located well for travel between Eastern US, Europe and Asia

787 and A350's are much better for direct flights between smaller airports; which ultimately benefits travellers as they spend less time waiting on transfers.

 

 

[fedssocr]

Emirates will probably scoop them up if they can rehab them. Given the pilot shortage I think there's still a place for them

[Keithambrose]

5 hours ago, reader said:

From Thai Enquirer

Thai Airways International Plc (THAI) has announced that it was selling its fleet of A380 as it would cost more than a billion Baht each to fix the aircraft that has been lying idle for more than 2-years. The fleet of A380 were grounded after the outbreak of Covid-19 and THAI has a fleet of 8 aircraft.

Globally A380 are being retired as A350 and Boeing’s 787 are starting to replace the 4 engine A380 that consumes a lot more fuel than the A350 and 787
that can fly the same distance but just on 2 engines.

 

 

I notice, when you drive in to Suvarnabhumi, there are rows of Thai planes just lined up, including A380s and 747s. There have been there so long, without any maintenance, that the fuselage colours have faded! Let alone the fact that Bangkok is one of the worst places to store aircraft, humidity, rain, etc. Just shows incompetence of the airline.

[vinapu]

1 hour ago, Keithambrose said:

I notice, when you drive in to Suvarnabhumi, there are rows of Thai planes just lined up, including A380s and 747s. There have been there so long, without any maintenance, that the fuselage colours have faded! Let alone the fact that Bangkok is one of the worst places to store aircraft, humidity, rain, etc. Just shows incompetence of the airline.

I agree with your observations but on subject of fading colors  - why bother with refreshing logos if plane is slated for sale anyways ? 

[reader]

Saudia Airlines is looking to emulate it Mideast neighbors and get into the international hub business so they might be a potential buyer. But if the equipment is deteriorating, its main value to a prospective buyer like Emirates may be the value of its parts since Airbus has stopped making them.

The ideal time to sell them was when Thai realized they didn't want them in their inventory which was years before covid hit. The carrier has always waited way too long to unload unloved equipment, deferring offers that didn't meet their elevated expectations. When they did sell, it was always at a price well below previous bids.

[macaroni21]

11 hours ago, omega said:

But they were built for an out of date hub and spoke network... still works really well for the Middle Eastern airlines whose home cities are typically not big destinations, but are located well for travel between Eastern US, Europe and Asia

 

 

Bangkok could have kept its status as a hub connecting incoming travellers from Europe, Japan, Korea, China, India and Australia to various destinations in southeast Asia and to each other of these further regions. If it had, Thai would have had good use of the A380s. Basically, Thai failed to keep up with its regional competitors such as Singapore Airlines. The latter flies 14 A380s according to a quick websearch I did. It just shows how bad the management of Thai has been.

[fedssocr]

I think Singapore's status as a business hub has helped them be that connection just like HKG. Certainly they've also got better management - TG has been mismanaged for a long time. TG never was able to make USA flights work since it's seen as a leisure destination and they are long flights. You can get people willing to pay more for those long flights to SIN but not to BKK. I wonder how Air Canada is doing with their BKK-YVR route

[PeterRS]

5 hours ago, reader said:

The ideal time to sell them was when Thai realized they didn't want them in their inventory which was years before covid hit. The carrier has always waited way too long to unload unloved equipment, deferring offers that didn't meet their elevated expectations. When they did sell, it was always at a price well below previous bids.

There is a short-termism that has affected THAI ever since it broke free of its founding partner SAS decades ago. This seems in large part due to political interference through its constantly changing Boards and Presidents - and a heavy dose of corruption. First, it had way too many varieties of aircraft, ready to purchase every new type that the manufacturers produced. The annual maintenance bill must have been huge.

It's biggest mistake, though, was ploughing money into its US routes with an aircraft type that did not really make sense. To be fair, other airlines thought the A340 would be ideal for certain long-haul non-stop routes. Singapore Airlines bought them for many European routes. But once it was in production and orders placed, the international airline regulators increased the amount of time a twin-engine aircraft could be in the air without having an alternate airport nearby. Thanks to significant improvement in engine performance, ETOPS (extended-range twin-engine operations performance standard) was increased from 120 to 180 minutes. Thus, in comparison to the upcoming Boeing 777, the 4-engine A340 became significantly more expensive to operate.

New York using A340s was always going to be a stretch for THAI. Even with an enlarged business class, it could not fly the route with a full load of passengers and cargo. It was a gas guzzler that rarely, if ever, made THAI any money. To service New York and LAX, TG purchased ten A340s between 2002 and 2004. Several politicians including Thaksin Shinawatra were charged by the Anti-Corruption Commission in connection with the purchase but then - not surprisingly - cleared of all charges.

Even so, the A340 worked for SIA's US routes for about a decade because the aircraft layout initially only had business class seating (later changed to a large business class and smaller premium economy). It therefore charged much higher ticket prices than THAI. When SIA stopped using them, it did a deal with Boeing to resell them back to the manufacturer as part of a larger deal to purchase 777s. THAI, on the other hand, tried to sell them on the open market. No one wanted them. With clearly no sense of urgency, the aircraft sat taking up airport space for 13 years and no doubt deteriorating badly before the airline managed to  sell five of them last year for the paltry sum of 350 million baht. Yet four A340s still remain unsold! In the years immediately beforehand, THAI had sold 11 smaller 737-400s for 2 billion baht. 

Now comes the A380 saga with more 'rotting' aircraft being put onto the market.

14 hours ago, reader said:

From Thai Enquirer

Globally A380 are being retired as A350 and Boeing’s 787 are starting to replace the 4 engine A380 that consumes a lot more fuel than the A350 and 787
that can fly the same distance but just on 2 engines.

Interestingly, while most airlines apart from Emirates had retired their A380 fleet, many of the aircraft have now been brought back into operation to meet the unexpected high demand for travel following covid. Most of these aircraft were stored away from their home  base in very low humidity places like Arizona or, in the case of Cathay Pacific, in Alice Springs in Australia, and routine maintenance was undertaken. Did no one in the THAI Board or management realise the huge amount of cash they were throwing down the drain by storing their A380s without regular maintenance in the heat and humidity at BKK? Indeed, why did TG spend so much on the aircraft in the first place apart from as a vanity offering? But that's another question!

I wonder what percentage of each THAI air ticket goes towards paying for THAI's mega errors?

[vinapu]

1 hour ago, PeterRS said:

......to meet the unexpected high demand for travel following covid.

unexpected? really ? 

Millions taking vacations and travelling every year were itching  for first sign of relaxation of restrictions  to jump and book their trip. So called revenge travel was long in the making and media, at least here, were warning that travel public will be back with vengeance criticizing airlines and airports for laying off too much staff and being unprepared for returns of travelling public.

[Keithambrose]

6 hours ago, PeterRS said:

There is a short-termism that has affected THAI ever since it broke free of its founding partner SAS decades ago. This seems in large part due to political interference through its constantly changing Boards and Presidents - and a heavy dose of corruption. First, it had way too many varieties of aircraft, ready to purchase every new type that the manufacturers produced. The annual maintenance bill must have been huge.

It's biggest mistake, though, was ploughing money into its US routes with an aircraft type that did not really make sense. To be fair, other airlines thought the A340 would be ideal for certain long-haul non-stop routes. Singapore Airlines bought them for many European routes. But once it was in production and orders placed, the international airline regulators increased the amount of time a twin-engine aircraft could be in the air without having an alternate airport nearby. Thanks to significant improvement in engine performance, ETOPS (extended-range twin-engine operations performance standard) was increased from 120 to 180 minutes. Thus, in comparison to the upcoming Boeing 777, the 4-engine A340 became significantly more expensive to operate.

New York using A340s was always going to be a stretch for THAI. Even with an enlarged business class, it could not fly the route with a full load of passengers and cargo. It was a gas guzzler that rarely, if ever, made THAI any money. To service New York and LAX, TG purchased ten A340s between 2002 and 2004. Several politicians including Thaksin Shinawatra were charged by the Anti-Corruption Commission in connection with the purchase but then - not surprisingly - cleared of all charges.

Even so, the A340 worked for SIA's US routes for about a decade because the aircraft layout initially only had business class seating (later changed to a large business class and smaller premium economy). It therefore charged much higher ticket prices than THAI. When SIA stopped using them, it did a deal with Boeing to resell them back to the manufacturer as part of a larger deal to purchase 777s. THAI, on the other hand, tried to sell them on the open market. No one wanted them. With clearly no sense of urgency, the aircraft sat taking up airport space for 13 years and no doubt deteriorating badly before the airline managed to  sell five of them last year for the paltry sum of 350 million baht. Yet four A340s still remain unsold! In the years immediately beforehand, THAI had sold 11 smaller 737-400s for 2 billion baht. 

Now comes the A380 saga with more 'rotting' aircraft being put onto the market.

Interestingly, while most airlines apart from Emirates had retired their A380 fleet, many of the aircraft have now been brought back into operation to meet the unexpected high demand for travel following covid. Most of these aircraft were stored away from their home  base in very low humidity places like Arizona or, in the case of Cathay Pacific, in Alice Springs in Australia, and routine maintenance was undertaken. Did no one in the THAI Board or management realise the huge amount of cash they were throwing down the drain by storing their A380s without regular maintenance in the heat and humidity at BKK? Indeed, why did TG spend so much on the aircraft in the first place apart from as a vanity offering? But that's another question!

I wonder what percentage of each THAI air ticket goes towards paying for THAI's mega errors?

Excellent summary. Corruption was a big issue years ago, as you say. Thai bought significant numbers of every possible type of plane from different manufacturers. All competing against each other. Not just maintenance issues but training and personnel. One further general point. Thai business class lagged behind other airlines for years. Fairly recently I was in a Thai 747, Sydney to Bangkok, business, seats from 20 years before, limited recline, only. I vowed never to use them again.

[Keithambrose]

14 hours ago, vinapu said:

I agree with your observations but on subject of fading colors  - why bother with refreshing logos if plane is slated for sale anyways ? 

Fair point, but I don't think the planes were necessarily slated for sale originally, and in any event easier to sell a plane in good condition. PeterRS has given a good summary. 

[reader]

The government has to shoulder the blame for inept management. It appointed a succession of CEO's as political rewards. It wasn't that those leaders didn't realize the bad judgements they were making because they were all were also aware that they'd face no consequences for their actions.

From CH-Aviation

NACC ends Thai Airways A340 corruption case, drops charges

18.07.2023 - 02:00 UTC

Thailand's National Anti-Corruption Commission (NACC) has cleared three former politicians of graft over the procurement of ten A340s for Thai Airways International (TG, Bangkok Suvarnabhumi) during 2003-2004.

Former prime minister Thaksin Shinawatra, former deputy transport minister Pichet Sathitchawan, former chairman of the Thai Airways board Thanong Pittaya, and former Thai Airways president Kanok Apiradee all faced dereliction of duty charges relating to the aircraft's acquisition process, which was found to be corrupt and to have substantially contributed to the state-owned carrier's ongoing financial woes.

Between 2002 and 2004, the then Thaksin-led Thai cabinet approved a plan by Thai Airways to buy four A340-500s and six A340-600 for THB53.5 billion baht (USD1.54 billion). The ten aircraft arrived between 2005 and 2008 and exited between 2012 and 2015. However, the quadjets accumulated losses of THB7 billion (USD202.1 million) in the first three years of operations on just two routes.

However, in a July 12 media interview, Pichet said the NACC had told him it would discontinue the charges against all four men. Notably, the NACC's decision comes ahead of Thaksin's planned return to Thailand later this month after several years in exile abroad.

Despite Thai Airways retiring the A340s between eight and 11 years ago, it has only managed to shift one of the planes - an A340-500 (HS-TYV (msn 698)) that went to the Royal Thai Air Force (Bangkok Don Mueang) in 2016 to serve as a VIP aircraft. Thai Airways has parked the three remaining A340-500s at Bangkok Don Mueang and the six A340-600s are at UATA!UTP.

However, Thailand-based news outlet The Nation reported last year that the airline managed to sell an additional A340-500 and four A340-600s to an undisclosed buyer for THB350 million (USD10.01 million). Citing Thai Airways chief technical officer Cherdphan Chotikhun, the outlet said the price was above the aircraft's assessed value, the contract had been signed, and the parties were now awaiting Thai Ministry of Transport approval to transfer ownership. Cherdphan added that talks were underway with prospective buyers concerning the remaining four A340s.

https://www.ch-aviation.com/portal/news/129786-nacc-ends-thai-airways-a340-corruption-case-drops-charges

[fedssocr]

Lufthansa is reactivating all 8 of their A380s and will base them at Munich. BKK is among the destination they'll be using the aircraft for. In a search of flights last night I did note an A380 LH flight to BKK in December. Their reasoning is the travel recovery and the further delays to the B777X program

https://onemileatatime.com/news/lufthansa-airbus-a380/

[PeterRS]

Only four of the scheduled airlines which were flying A380s pre-covid have not so far brought them back into service - Air France, China Southern, Malaysia and THAI. Not all the delivered aircraft are flying, but a good many more than anyone expected even a couple of years ago.

21 hours ago, reader said:

The ideal time to sell them was when Thai realized they didn't want them in their inventory which was years before covid hit. The carrier has always waited way too long to unload unloved equipment, deferring offers that didn't meet their elevated expectations. When they did sell, it was always at a price well below previous bids.

THAI should never have bought them in the first place! It already had more than enough capacity on its 747-400 fleet which it continued operating until 2020, considerably longer than almost all other scheduled airlines. JAL retired its 747-400 fleet in 2011, Singapore Airlines in 2012, ANA in 2014, and Cathay Pacific its entire fleet in 2016. So TG did not need the additional roughly 100 seat capacity that it offered on its individual A380s, the more so when these extra seats were almost all in the cheaper economy cabins. When purchased, the airline only increased the number of high revenue-generating seats in first and business class by a mere 8 more than on its 747-400s. They had no premium economy cabin.

Re THAI's plan to sell their six aircraft, in January this year Emirates purchased a second hand 14-year old A380 from a leasing company for US$30.5 million. It was actually an aircraft Emirates was already flying and so it was aware it was in perfect condition. That's roughly the amount it would cost THAI to get each of its A380s properly maintained and ready to fly again. Effectively, therefore, the value of each THAI A380 is now pretty close to US$0!

[Keithambrose]

3 hours ago, PeterRS said:

Only four of the scheduled airlines which were flying A380s pre-covid have not so far brought them back into service - Air France, China Southern, Malaysia and THAI. Not all the delivered aircraft are flying, but a good many more than anyone expected even a couple of years ago.

THAI should never have bought them in the first place! It already had more than enough capacity on its 747-400 fleet which it continued operating until 2020, considerably longer than almost all other scheduled airlines. JAL retired its 747-400 fleet in 2011, Singapore Airlines in 2012, ANA in 2014, and Cathay Pacific its entire fleet in 2016. So TG did not need the additional roughly 100 seat capacity that it offered on its individual A380s, the more so when these extra seats were almost all in the cheaper economy cabins. When purchased, the airline only increased the number of high revenue-generating seats in first and business class by a mere 8 more than on its 747-400s. They had no premium economy cabin.

Re THAI's plan to sell their six aircraft, in January this year Emirates purchased a second hand 14-year old A380 from a leasing company for US$30.5 million. It was actually an aircraft Emirates was already flying and so it was aware it was in perfect condition. That's roughly the amount it would cost THAI to get each of its A380s properly maintained and ready to fly again. Effectively, therefore, the value of each THAI A380 is now pretty close to US$0!

Another excellent summary! On the widebody front I think they have every version of the 777, plus A350s and 787s!