The merger is viewed as a tactical choice to assist the floundering THAI in getting out from under its mountain of debt and losses, which were made worse by the Covid-19 outbreak.
The Thai Airways Creditors Committee has given its blessing to the merger of Thai Airways International Plc (THAI) with Thai Smile Airways, a fully owned subsidiary of THAI.The committee’s choice, which was made as part of the parent company’s reorganization plan, was finalized on May 18, according to THAI CEO Chai Eamsiri.
The 20 aircraft in Thai Smile’s fleet will be transferred to THAI this year as a result of the merger. This change is anticipated to boost daily flying hours by 11 and cut operational costs by up to 20%. Thai Smile originally purchased the fleet from THAI, which is currently leasing it.
The combination, according to THAI, should result in higher aircraft utilization rates. While THAI averages 12–13 flight hours per day, Thai Smile currently only runs with an average of 9 flight hours per day. Thai Airways hopes to boost the daily aircraft usage by 11 flight hours by incorporating Thai Smile’s Airbus A320 aircraft into its fleet.
The improved utilization, according to Chai, will enable THAI to increase the number of domestic and international routes it serves, boost the number of nighttime flight hours it offers, and cut operational expenses by up to 20%.
THAI announced that it would start the process of transferring the management rights of the 20 aircraft and tell the Stock Exchange of Thailand about the situation. The Ministry of Transport and Thailand’s Civil Aviation Authority will also receive notifications.
The merger is viewed as a tactical choice to assist the floundering THAI in getting out from under its mountain of debt and losses, which were made worse by the Covid-19 outbreak. In May 2020, THAI sought bankruptcy protection and underwent a court-mandated restructuring process. Thai Smile Airways, a regional branch of THAI that began operations in 2012, has been doing better than its parent business, but it still confronts difficulties in the cutthroat low-cost airline industry.
The two airlines’ passengers, staff members, and Thailand’s tourism industry are all anticipated to gain from the merger. Along with better service quality and safety standards, the new airline will give customers more flexibility and options. The staff from both airlines will be combined into a single workforce with distinct career options. The new airline’s improved connection and capacity, which will aid in the industry’s post-pandemic recovery, will also boost the tourism sector.
