Thai Airways

Beginnings

Thai Airways International was founded in 1960 as a joint venture between Scandinavian Airlines System (SAS), which held a 30 percent share of the new company valued at two million Thai baht, and Thailand's domestic carrier, Thai Airways Company (Thai: เดินอากาศไทย). SAS provided operational, managerial, and marketing expertise, with training aimed at building a fully independent national airline in the shortest possible time. Thai nationals were gradually able to assume full managerial responsibility and the number of expatriate staff duly decreased, with expatriates accounting for less than one percent of staff based in Thailand in 1987.

The airline's first intercontinental services using Douglas DC-8s started in 1971 to Australia, and then to Europe the following year. A number of the larger Douglas DC-10 wide-body tri-jets was acquired in the late-1970s. Services to North America commenced in 1980.

On 1 April 1977, after 17 years of capital participation by SAS, the Thai government bought out the remaining 15 percent of SAS-owned shares and Thai became a state owned enterprise of the Thai government. As of 22 May 2020, the Thai Ministry of Finance is no longer the majority shareholder, having reduced its holding to 47.86 percent from 51.03 percent.

In 1979, the carrier received its first cargo aircraft which is a Douglas DC-8-62AF used for flying between Bangkok and Karachi, Frankfurt, Copenhagen, Hong Kong as well as a flight from Copenhagen to Paris.

1980s and 1990s: merger with Thai Airways Company

On 6 December 1987, services to Auckland in New Zealand were inaugurated. On 1 April 1988, then-Prime Minister Gen. Prem Tinsulanonda, merged the international and domestic operations of the two companies to form the present company, Thai Airways International, to have a single national carrier. On 25 June 1991, the reconfigured company listed its shares on the Stock Exchange of Thailand and offered them to the public. The Thai public offering of shares is the largest ever undertaken in the country.

In 1997, Thai Airways planned a privatization program, the first in Thai history.

On 14 May 1997, Thai Airways, along with Lufthansa, Air Canada, SAS, and United Airlines, founded the world's first and largest airline alliance, Star Alliance.

The genesis of Thai's later financial difficulties has been attributed to actions taken in the 1990s when Thai Airways began "buying every type of plane that was being manufactured." Different models meant that the airline had to train an army of technicians to keep differing airframes and engines from both General Electric and Rolls-Royce airworthy, significantly inflating maintenance costs.

2000s: Airline brand renewal and financial difficulties

In the first decade of the 21st century, Thai Airways continued its route network expansion with new services to Chengdu, Busan, Chennai, Xiamen, Milan, Moscow, Islamabad, Hyderabad, Johannesburg, and Oslo.

Using the Airbus A340-500 fleet, which was acquired in 2005, Thai commenced non-stop flights between Bangkok and New York and Bangkok to Los Angeles, its first non-stop service to North America. The airline later converted an existing one-stop service (via Tokyo) to Los Angeles into a non-stop flight using the same aircraft type. Citing very high fuel costs, Thai discontinued the New York service in July 2008. The service to Los Angeles was again reverted to one-stop service via Seoul on 1 May 2012, leaving the airline without a non-stop service between Thailand and North America. The A340s used were phased out, replaced by the Boeing 777-200ER for the Bangkok–Seoul–Los-Angeles route.

The 2000s also saw Thai expand its Thai airport network beyond its Bangkok hub. The airline launched non-stop flights from Phuket to Tokyo, Seoul, and Hong Kong.

During the late-2000s, Thai's growth was hampered by a combination of internal and external factors, including a spike in fuel prices, domestic political conflict in Thailand, and the global economic crisis of the late-2000s. In 2008, after achieving profitability for the previous 40 years, Thai recorded a loss for the first time in its history of around 21 billion baht (US$675 million). The airline blamed high fuel costs and Thailand's political turmoil. As of Q2 2009, after a series of restructuring initiatives, including a two-year deferral of its Airbus A380 deliveries, the carrier returned to a net profit of 2.5 billion baht.

Thai's need for reform became evident in the first decade of the 21st century, but reforms, when they came, were invariably cut short. Thai's problems were threefold: ineffective leadership at the top; inexperienced boards; and a coddled union. Piyasvasti Amranand took Thai's helm in October 2009 after serving as energy minister. At Thai, he is still regarded as a true reformer, imposing salary cuts for senior executives as part of his drive to reduce costs. He was voted out by the board in 2012 for what may have been political reasons. The board of directors was, after the 2014 Thai coup d'état, packed with military brass.