THAI plans to resume plane purchases as earnings rebound

After a five-year austerity drive, THAI is ready to expand again. The carrier plans to add routes and buy new, more fuel-efficient aircraft to replace aging jets, President Charamporn Jotikasthira said. The airline, which last ordered planes in 2011, is drawing up a 10-year plan through 2027 that will include the aircraft purchases to help boost passenger growth, he said. The company is playing catch-up to full-service operators in Southeast Asia. Adding new planes that use less fuel will help the Thai flag carrier control costs as it increases flights and more aggressively competes on ticket pricing, Charamporn said. “Its high costs, old fleet and inefficiency had been the big problem to compete with other full-service and budget airlines,” said Narongsak Plodmechai, from SCB Asset Management. “Since the implementation of the restructuring program, costs have come down significantly, while fares are much more competitive.” Charamporn’s cost cuts and a decline in oil prices helped Thai Airways return to profit in the first half and have fueled a 191% surge in the company’s shares this year, compared with an 11% drop for the Bloomberg Asia Pacific Airlines Index. The stock slumped 37% in 2015. The earnings rebound has also enabled the carrier to repay debt of about US$318m so far this year, CFO Narongchai Wongthanavimok said. <br/>