Thai Airways International is currently in discussions to secure a significant order of widebody aircraft from both Boeing and Airbus. This ambitious deal could include nearly 100 aircraft, consisting of about 80 twin-aisle planes and a dozen single-aisle jets, acquired through a lease agreement.
A Leap Toward Recovery and Competition
This development arrives at a crucial time for Thai Airways as it aims to emerge from its debt restructuring process soon. With the industry gearing up for intense competition post-pandemic, the airline is taking proactive steps to strengthen its position. Earlier this month, Thai Airways achieved a remarkable feat by reporting a substantial profit for four consecutive quarters, a first in its history.
Details from Bloomberg and Airlinerwatch suggest that Thai Airways is negotiating for up to 90 aircraft. While specifics of the deal are still under wraps, the airline is considering adding more Airbus A330s, A350s, Boeing 777s, or 787 Dreamliners to bolster its widebody fleet. Boeing and Airbus, maintaining confidentiality, have yet to share any details of the potential deal until official announcements are made.
As Thai Airways works toward exiting bankruptcy by next year, its total Q3 revenue, excluding one-time transactions, reached 37,008 million baht ($1,046,014). This marked a 12.6% increase from Q3 2022 and signified the airline’s fourth consecutive quarter of profit. During this period, the airline carried 3.27 million passengers with an average cabin factor of 77.3%. Looking ahead to Q4 2023 and Q1 2024, Thai Airways anticipates a highly competitive aviation landscape as airlines resume services with aircraft capacities similar to pre-pandemic levels.
Global Trends in Aviation Fleet Expansion
The surge in demand for increased capacity and widebody flights this year is evident across the global aviation industry. Airlines are actively seeking new, fuel-efficient planes to modernize their fleets. Notably, at the Dubai Air Show earlier this month, Emirates placed a massive order for the 777X and committed to more A350-900s, signifying the industry’s growing focus on expanding and updating aircraft fleets.
In the Philippines, Cebu Pacific has announced plans to issue a Request for Proposal (RFP) for 100 to 150 narrowbody planes. This decision aligns with the expectation of heightened competition in the aviation sector. The upcoming New Manila International Airport in Bulacan, along with upgrades to Clark and Cebu airports, is set to increase flight capacities in the region, further fueling the need for more aircraft.
Should Philippine Airlines Consider a Major Aircraft Order?
This brings me to Philippine Airlines (PAL). While airlines globally have been placing large aircraft orders in anticipation of a significant uptick in air travel and more intense competition, PAL has ordered 9 Airbus A350-1000s with an option for 3 more frames. However, I feel this may not be sufficient to compete globally as airlines begin to order hundreds of planes, including Cebu Pacific. I honestly believe it’s time for them to consider a more aggressive order of brand new widebody and narrowbody planes to compete with the likes of Cathay Pacific, Starlux, Eva Air, Singapore Airlines, Korean Air, and other airlines serving routes to and from the Philippines.
Based on my own analysis, for PAL to maintain a larger share of the air travel market in the Philippines, they may need a substantial fleet of narrowbody and widebody jets operating from both Manila and Cebu. The A350-1000 is already a perfect plane for the job, but they would benefit from more A350-900s, and new planes such as the Boeing 787 and A320/321neos, which offer better hard products. This would mean adding more than a hundred planes to its fleet in the next 3 to 5 years and beyond, for both PAL and subsidiary PAL Express combined. It will also be advantageous for them to have enough planes to operate long-haul flights from both Manila and Cebu, offering more frequencies and options for passengers.
The Philippines has the potential to be a major transit hub for routes between Asia and the US mainland and between Australia and Europe, also known as the “Kangaroo Route.” PAL will play a significant role in making the Philippines a transit hub, but of course, a larger and better airport is definitely needed.
First love never dies. I fell in love with airplanes and aviation when I was a kid. My dream was to become a pilot, but destiny led me to another path: to be an aviation digital media content creator and a small business owner. My passion for aviation inspires me to bring you quality content through my website and social accounts. Aviation is indeed in my blood and blog!
