Thai Airways plans to order more jets as tourist arrivals surge

BANGKOK (Reuters) – Thai Airways International PCL will seek board approval this month to purchase new jets amid a surge in tourist arrivals that has boosted demand, the airline's top executive said on Tuesday.

The airline expects to fill 79 percent of seats in 2018, up from 78.2 percent in the third quarter of last year, acting Thai Airways president Usanee Sangsingkeo told reporters.

Tourism accounts for about 12 percent of gross domestic product in Southeast Asia's second-largest economy and has also driven growth in the hospitality and retail sectors.

Thailand expects 37.55 million tourists to arrive this year, up 6 percent from 35 million in 2017.

Usanee did not elaborate on the purchase plans, but research firm CAPA Centre for Aviation in November said the airline was looking to buy eight to nine narrowbody and 20 widebody jets for delivery from 2019 to 2022.

CAPA said the narrowbodies, likely to be Airbus SE A320s, were meant to expand the fleet, while the widebodies would replace older Boeing Co. 747400s, 777-200s and 777-300s.

The UN International Civil Aviation Organization in October removed a red flag against the country over safety concerns, allowing Thai carriers to add international flights.

A separate safety review by the US Federal Aviation Administration is expected to conclude in March and Thai Airways could launch US routes by October, Usanee said, adding that the airline was studying new routes such as San Francisco.

Other Southeast Asian airlines like Vietnam Airlines JSC are also planning non-stop flights to the United States, despite profitability challenges.

Airlines are also trying to cope with rising fuel costs. Thai Airways' low-cost subsidiary, Nok Air said it would increase ticket prices on some routes to cope with higher fuel prices, Nok Air CEO Piya Yodmani said on Tuesday.

Last week, regional competitor PT Garuda Indonesia said it was looking at more hedging options due to higher fuel costs.