Thai Airways plans to merge Thai Smile into mainline carrier
May 16, 2023
Thai Airways International plans to fold its wholly-owned regional arm Thai Smile into the mainline carrier as part of its ongoing restructuring. Speaking on 10 May at the recent ISTAT Asia conference in Bangkok, the airline's chief executive Chai Eamsiri made the case for the merger given the low aircraft utilisation of Thai Smile's fleet of Airbus A320s, although he did not give a timeline for this. Eamsiri says the regional airline, which operates mostly domestic and some regional international routes, uses only five aircraft that fly nine hours or less per day, per aircraft - a level that he says "is too low". The solution is to integrate Thai Smile into Thai in order to fold in the 20 A320s into the mainline carrier's fleet, he says, which will increase aircraft utilisation to "more than 11 hours per day". "That means 20% less in terms of aircraft cost," he adds. Fleets data shows that the 20 A320ceos in Thai Smile's fleet have an average daily utilisation of 5.68 hours, with the range between two and slightly over seven hours. This has fallen from the 7.65 hours in the previous 12-months average daily utilisation. The aircraft range between seven and 11 years old, with 15 under operating lease with Macquarie AirFinance, DAE Capital, Airborne Capital, SMBC Aviation Capital, Tokyo Century and Aircastle. Networks data shows that the longest route it flies currently in May is to Ahmedabad in India, a flight time of just under five hours. Eamsiri says the merger will also benefit passengers in terms of access to destinations from long-haul, regional and domestic destinations, especially via Thai's wider range of interline agreements. He notes that Thai Smile has less than 10 interline agreements with international airlines, and when combined with Thai it will grow to more than 60. "So it's very clear when bringing these two together is better… also it's better for the customer." In its financial results for the first quarter published on 12 May, Thai disclosed that it was "proceeding [with] the feasibility study for the entire airline business restructure of Thai and its subsidiaries to mitigate the accumulated losses over the registered capital of Thai Smile" as part of its rehabilitation plan and business reform plan. "The result expected from business restructure plan include improving the efficiency of fleet utilisation, enhancing revenue opportunities from route network with more flights (resulting a better aircraft utilisation, especially international route with high yield and less competition than domestic route)." However, it flags the constraints of procuring aircraft in the short-term amid the continued aviation recovery and limitations of aircraft manufacturers in expanding production capacity to meet the rapid increase in traffic demand. "There are several challenges including the marketing and brand positioning unity by combining strengths in products and services performance, work efficiency improvement in parts of procurement, human resource management and others relevant areas for resources optimisation and reduction of unnecessary redundant costs with full support of Thailand tourism policies," it states. According to its financial statements, aircraft utilisation of Thai and its subsidiaries' fleet of 66 aircraft was 14.1 hours in first quarter of 2023, versus 8.3 in the year-ago quarter, when it had 67 aircraft. As of 31 March, it had total 65 active aircraft including the 20 Thai Smile A320s, 21 in long-term parking and 16 decommissioned aircraft that had been put up for sale.
EgyptAir seeks bids for A320
May 16, 2023
EgyptAir is looking to sell one of its Airbus A320s. The North African carrier is inviting bids on a 2003-vintage narrowbody (MSN 2094) equipped with International Aero Engines V2500s, aircraft asset management director Haitham Saleh states in a LinkedIn post. The jet is being sold in an "as is, where is" condition.
Southwest pilots approve strike authorisation
May 15, 2023
Southwest Airlines pilots seeking a new contract with the US major have voted in favour of authorising a strike. The Southwest Airlines Pilots Association (SWAPA), which represents the Dallas-based carrier's 10,000 pilots, says its strike authorisation vote closed after a week and half with 98% participation and 99% of pilots voting in favour of a strike authorisation. Voting commenced on 1 May and was intended to run through the end of that month. SWAPA president Casey Murray on 18 January called for a strike authorisation vote among union members, stating that a "lack of discussion or commitment" from the airline's leadership team to "rectify" operational issues for passengers and pilots "drove us to make the decision to carry forward on this path afforded to us by the [US] Railway Labor Act". On 11 May, Murray stated: "The lack of leadership and the unwillingness to address the failures of our organisation have led us to this point. Our pilots are tired of apologising to our passengers on behalf of a company that refuses to place its priorities on its internal and external customers." He adds that the union's next step is to petition the US National Mediation Board to release it to "self-help imminently", after which it will follow the process set forth by the Railway Labor Act and continue toward a strike. "We want our customers to be prepared for the path ahead and make arrangements on other carriers so that their plans through the summer and fall are not disrupted." Southwest notes in response to the results of the strike authorisation vote that its pilots are not on strike, and that the vote "has no impact" on its scheduled operations. "In fact, a strike can occur only after multiple steps in the Railway Labor Act collective bargaining process are exhausted, including the National Mediation Board releasing both parties from mediation to end talks," the carrier says. Adam Carlisle, vice-president labour relations for Southwest, states: "This anticipated authorisation vote result does not change our commitment to the negotiation process, and we look forward to continuing discussions with SWAPA at the negotiating table." Before a strike by SWAPA members can commence, the National Mediation Board must first offer the parties an opportunity to arbitrate the contract dispute. If either side declines the arbitration, both parties enter a 30-day cooling-off period, after which self-help – such as a labour strike or a lockout enacted by management – could be authorised only if a Presidential Emergency Board (PEB) is not established. Under the terms of the Railway Labor Act, if a dispute substantially threatens essential transportation in any section of the USA, the National Mediation Board notifies the US president, who may establish a PEB, which investigates the dispute during a 30-day period and advises the president and issues recommendations. The two parties subsequently can accept the PEB's recommendations, negotiate their own agreement or, after 30 days from the issuance of the PEB to the president, exercise self-help, unless the US Congress takes action. Southwest is the third US major to have recently been faced with strike authorisation votes by pilots' unions. On 1 May, the Allied Pilots Association (APA), which represents American Airlines' 15,000 pilots, disclosed that its membership voted "overwhelmingly" to approve a strike authorisation for the Fort Worth-based carrier's pilots. In October 2022, Delta Air Lines' pilots voted to authorise its union – the Air Line Pilots Association (ALPA) – to call a strike if contract negotiations with the carrier break down and legal conditions for a strike were met. On 1 March 2023, Delta's pilots ratified a four-year contract, which includes more than $7 billion in cumulative pay increases over four years.