The company will also stop A340-600 services. Four A330-300 aircrafts will also be decommissioned. By July, Thai Airways hopes to sell 22 of its aircrafts.
The stoppage of services and decommissioning of planes comes amidst a series of losses for the company. The Thai carrier has approximately $5.9bn in debts (the highest in the region) and has seen 7 straight months of losses.
The company’s restructuring is being overseen by Thai Airways president Charumporn Jotikasthira. Charumporn is expected to cut capacity by 20%, sell non-core assets and reduce the fleet size from 101 to 77 aircraft by the end of 2015. As part of the downsizing, the company will be phasing out A340s and 747s. Plans to close routes to Moscow, Johannesburg and Madrid have also been announced.
Thai Airways was once a leader in the cargo market, but the company has stopped and started its freight services multiple times in recent years. The carrier was the first to use a 777F in hopes of returning to freighters. But its losses are partly due to the fact that air freight exports have declined. BFS (Bangkok Flight Services) stated that exports were down 4% in February year-over-year.
The decision to stop cargo services gives other competitors, like Hong Kong’s Cathay Pacific, an advantage. Cathay Pacific is investing heavily in cargo despite Thai Airways and IAG stopping their services. Other airlines, like AF-KLM and Singapore Airlines, have decided not to re-invest.
While Thai Airways has seen consecutive losses, Cathay Pacific has seen an increased profit of 20%. Cargo revenues were up in the middle of 2014, which provided the company with a strong fourth quarter.