Thai Airways to merge with Thai Smile to ‘reduce losses’

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 about the merger plan is now underway to revise the business plan under a unified strategy management team. We expect this to finish by May.”

The plan will be proposed to a creditors’ committee before it is submitted to Transport Minister Saksayam Chidchob for approval by year’s end.

The restructuring strategy aims to unite all subsidiaries into a single operation comprising the central management office, staff, cabin crews, pilots and back-office systems to reduce fixed costs and operating expenses. The company also hopes to achieve greater efficiency in human resources and aircraft.

Thai Airways CEO Chai Eamsiri said the plan would simplify the management and timetables and help the airline operate all flights smoothly. The merger would not affect THAI’s rehab plan nor services. All 800 employees of Thai Smile would be retained.

If the merger proceeds, Thai Airways will see its capacity boosted while flight operation hours of Thai Smile will be lengthened from nine to around 12-13 per day. This could reduce its budget by 30%. In addition, the company plans to use only Thai Airways Kitchen, without resorting to external suppliers.

According to the Department of Business Development, Ministry of Commerce, Thai Smile has made losses since its inception. From 2013 to 2021, the airline made a cumulative loss of nearly 16 billion baht (US$460 million).

Chai said Thai Airways and its subsidiary would make around 140 billion baht in revenue this year, up 30%. Flight occupancy could climb to 80%.

Thai Airways have resumed international flights to Europe, Australia, China and Japan, among others.