Thai's Dire Straits

In the years leading up to the current decade, Thai Airways knew nothing but profits — more than 40 straight years of profits. Then its world turned upside down. From 2011 through 2018, Thailand’s national carrier amassed nearly $1.8b in net losses. And the trends are getting worse, not better.

The story of Thai Airways this decade is a story not unlike those of U.S. legacy carriers last decade. It’s a story of once-placid markets suddenly barraged with home-grown, low-cost competition. But in Thai’s case, it’s not just home-grown, low-cost competition. Thailand today is a battleground for Gulf carriers, Chinese carriers, Japanese carriers, Australian carriers, European carriers, Indian carriers, and Russian carriers, all carrying low-yield tourists to Bangkok, Phuket, and other leisure destinations. In the Thai domestic market alone, Thai Airways, with just a 16% share of the market, competes with Bangkok Airways and the local affiliates of Malaysia’s AirAsia, Vietnam’s VietJet, and Indonesia’s Lion Air. It competes with the LCC Nok Air too, originally founded by Thai and still partly owned by it. Nok is now teaming with Singapore Airlines to serve low-cost longhaul flights from Bangkok, another competitive headache for Thai. Thai AirAsia X is likewise flying longhaul from Bangkok, now armed with A330 NEOs.

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