Thai Airways has officially dissolved its budget subsidiary, Thai Smile Airways, following over a decade of operations, due to extensive financial losses and a negative equity position, according to a report by The Star.
The move comes amid Thai Airways’ ongoing restructuring efforts, which began after the airline filed for bankruptcy protection in 2020 during the COVID-19 pandemic. Thai Smile, which launched in 2012 as a hybrid carrier positioned between full-service and low-cost models, had reportedly accumulated more than 20.9 billion baht in losses and carried negative equity of approximately 9.7 billion baht by the time of closure.
Initially intended to serve as a regional connector with a higher standard of service than traditional budget airlines, Thai Smile operated routes across Thailand and nearby countries with a fleet of Airbus A320 aircraft. However, despite brand support from its parent company, the carrier struggled to maintain profitability.
The airline officially ceased operations on their Thai Smile service after 12 years of service Photo Courtesy Terry Figg
Low-cost competitors such as Thai AirAsia, VietJet Thailand, and Nok Air have dominated the Thai domestic and short-haul regional markets in recent years. These airlines offered lower fares, higher flight frequencies, and leaner cost structures, intensifying pressure on Thai Smile’s hybrid business model.
The closure is part of a broader restructuring strategy at Thai Airways aimed at consolidating operations, improving cost efficiency, and focusing on core services. No detailed public statement has been issued by Thai Airways regarding how it plans to handle passenger bookings, staff reallocations, or the integration of Thai Smile routes into its mainline network.
While the airline has advised passengers to check official channels for updates, affected customers have so far received limited guidance regarding refunds or flight reassignments.
The dissolution of Thai Smile reflects the ongoing reshaping of Thailand’s aviation sector, which continues to recover from pandemic-related setbacks. According to recent data from Airports of Thailand (AOT), domestic air traffic in 2025 has yet to return to pre-pandemic levels, and the industry is seeing increased consolidation among carriers.
Thai Smile’s exit reduces consumer choice in the regional market and could result in fewer low-fare options on certain routes. At the same time, it allows Thai Airways to streamline its operations and potentially strengthen its financial footing after years of turbulence.
As the restructuring continues, more information is expected on how Thai Airways will handle the transition of aircraft, personnel, and existing route obligations.
