Thai Airways outlook weakens as political uncertainty lingers and competition intensifies

Like some other longstanding flag carriers, Thai Airways is facing a critical juncture as the airline continues to struggle amid challenging market conditions. The government-owned flag carrier needs to make adjustments and restructure but implementation of a new business plan will be complex following turnover at the board and executive level.

Thai's traffic figures have been sharply down since late 2013 as prolonged political uncertainty has impacted inbound demand. Load factors continued to plummet in 2Q2014, dipping below 60% in May and June, despite capacity cuts.

Political turmoil has led to the delay in important strategic decisions, including critical fleet renewal. Meanwhile, competition in the Thailand market is intensifying with the launch of three new low-cost carriers, further weakening Thai's outlook.