Thai Airways Nears Deal for Up to 100 Boeing Aircraft, Excluding Airbus Amid Engine Pricing Dispute

Thai Airways International (TG), the flag carrier of Thailand, is reportedly in advanced negotiations with Boeing for the acquisition of up to 100 aircraft in a combination of firm orders, options, and purchase rights, according to sources. The talks are said to be nearing finalization, with Airbus effectively excluded from the competition due to disagreements with its engine supplier.

Thai Airways is in the final stages of discussions with Boeing to secure approximately eight Boeing 787 widebody aircraft and 15 narrowbody planes. The potential deal aims to meet the airline’s expansion and modernization goals, capitalizing on increasing passenger demand for travel to and from Thailand.

Airbus, initially a contender, is no longer in consideration for the order. This exclusion is attributed to disputes between Thai Airways and Rolls-Royce, the sole engine manufacturer for Airbus A350. The airline has expressed concerns about Rolls-Royce’s pricing, prompting Thai Airways to explore alternatives.

Although Airbus had proposed its A350 model as an alternative to Boeing’s offering, Thai Airways opted out due to challenges in negotiating favorable terms with Rolls-Royce, the engine provider for the A350.

Boeing’s favorable position in the negotiations is reportedly influenced by Rolls-Royce’s firm stance on pricing and its reluctance to offer substantial discounts. Thai Airways, seeking cost-effective solutions, appears inclined towards Boeing’s B787 model.

Thai Airways, undergoing a restructuring and rehabilitation process, aims to revitalize and expand its fleet after downsizing. The impending order would mark a significant step in renewing the airline’s capacity and competitiveness.

Thai Airways’ existing fleet includes Airbus A320 family aircraft, A330-300s powered by Rolls-Royce Trent 700 engines, and A350-900s equipped with Trent XWB engines. The Boeing segment of its fleet comprises Boeing 777-200ERs, 777-300ERs, 787-8s, and 787-9s.

Thai Airways’ move towards finalizing a substantial aircraft order reflects its commitment to leveraging Bangkok’s strategic hub position and accommodating rising travel demand. The focus on Boeing, amid challenges with Rolls-Royce and Airbus, underscores the complexities airlines face in securing favorable terms for fleet expansion.