Thai Airways slams Rolls-Royce for tougher stance on pricing

Thai Airways International PCL faulted Rolls-Royce Holdings Plc for an alleged refusal to offer more favorable terms on aircraft engines, threatening to take its business elsewhere as the carrier prepares to place an order in coming weeks.

Speaking in an interview in Singapore at the Association of Asia Pacific Airlines annual meeting, Chief Executive Officer Chai Eamsiri said Rolls-Royce should reconsider its hard stance. The airline is already a Rolls-Royce customer for its Boeing Co. 787 and Airbus A350 widebody jets, and Eamsiri said the Bangkok-based carrier plans to buy new aircraft by the end of the month.

“You should never play hard to your customer,” Eamsiri said in the interview. “If you play hard, you may win in the short term but lose for the long term.” 

Under new CEO Tufan Erginbilgic, Rolls-Royce has taken a much tougher approach to pricing as it focuses on profit. The company was previously willing to offer steep discounts to win business, hoping to then make a profit through long-term service contracts. Erginbilgic, by contrast, has signaled he’s prepared to miss out on some deals as he seeks to put Rolls-Royce on a more stable financial footing. 

A Rolls-Royce spokeswoman said the company always looks for “win-win solutions” with customers to build long-term, sustainable relationships and that “their success is at the heart of everything we do.”

Thai Airways has suffered reliability issues with its Rolls-Royce Trent 1000 engine powering the 787, a problem that has affected that particular model since before the pandemic. That’s left the airline with at least one 787 grounded on a constant basis, Eamsiri said. 

The CEO said Rolls-Royce should be more flexible in their terms, and that as a customer he can choose alternatives. While the A350 is a Rolls-Royce-only aircraft, the 787 also comes with an engine built by General Electric Co., which is the more popular variant for that jet. 

Thai Airways is set to report third-quarter results on Friday. Eamsiri said the carrier will be profitable, extending its positive run into a fourth consecutive quarter for the first time.

Following a radical restructuring during the pandemic that saw Thai Airways cut its employee numbers by half, the airline is still working through a court-monitored debt restructuring. The carrier is now in the process of rebuilding its operations, with about 65 aircraft in its fleet, compared with 103 pre-pandemic.