Orient Thai, One-Two-Go Plan to Buy 20 New Jets

By Boonsong Kositchotethana, Bangkok Post, Thailand

Dec. 19–Orient Thai Airlines and its budget unit One-Two-Go Airlines plan to undergo a major fleet revamp, replacing its ageing aircraft with a new generation of jetliners expected to cost a total of US$2.5 billion.

The airline group hopes to acquire 20 brand-new jetliners, including eight Boeing 787-9s and 12 Boeing 737-900s, for delivery starting in the next four years.

The ambitious plan, announced yesterday by founder and chief executive Udom Tantiprasongchai, represents a bold change in the airline group’s hardware. Until now the airline has relied entirely on used, fuel-thirsty aircraft made about 25 years ago, one of which crashed at Phuket Airport in September, leaving 89 dead and 41 injured.

Mr Udom described the fleet revamp as a change in business model. The airline plans to move away from the budget model into a full-service airline concept. However, One-Two-Go would likely maintain its no-frills carrier status.

The Boeing 787-9s with 380 seats in a one-class configuration would support Orient Thai’s strategy to become a long-haul carrier, while the smaller 737-900 ER, capable of seating 220 passengers, would essentially be used for One-Two-Go’s domestic routes. These new jetliners would gradually replace the eight Boeing 747s and 10 MD-80s it has now.

Mr Udom said the group was negotiating the plane purchase with the US plane maker Boeing and hoped to place an order for the jets in April next year.

Orient Thai, now serving flights from Bangkok to Hong Kong and Seoul’s Incheon airport, would fly farther from the Thai capital to main air hubs in Europe and Scandinavia.

The group has yet to determine the best option for acquiring the new aircraft. It may lease them or purchase them with US Exim Bank loans, according to Mr Udom. It plans to raise additional equity within the company to secure funding for the fleet revamp.

The company’s plan to launch an initial public offering remains intact. “What we need to do now is to consolidate our position before offering the IPO in the next two years,” he said.

The group last year carried about 1.5 million passengers, about 30-40 percent of them on One-Two-Go’s domestic services.

Meanwhile, Mr Udom, 52, has announced his plan to retire from active work in the next five years, and possibly allow his two daughters to succeed him.

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