As competition gets tougher for Thai Airways with low cost carriers AirAsia and Nok Air looking at launching soon long-haul flights, Thailand’s national carrier needs a serious overhaul, according to a former Thai member of the board in a seminar with extracts reported by the Bangkok Post.
BANGKOK – A former member of the Thai Airways International Plc board is calling for a rapid privatization of Thailand national flag carrier, before it goes worst. Banyong Ponpanich blamed particularly management methods of the airline and its lack of professionalism due to political interference into the airline’s daily business. According to Ponpanich at a seminar, Thai Airways International is heavily indebted with an accumulated debt of THB 250 billion (US$ 8 billion) while its own operating fund is only of THB 56 billion (US$ 1.7 billion). Thai has always been a milking cow and a toy in the hands of the Thai government.
The airline is forced to follow the recommendations of the board of directors, all filled with acquaintances from politicians with little vision on the way to run business. Half of Thai board members are government officials and the other half are appointed by politicians.
Mr. Ponpanich says that the only way to save Thai Airways International would be to privatise it, especially as it faces tougher competition. ”It has been proven that state enterprises cannot compete with the private sector. There are examples from several airlines. After undergoing privatisation British Airways was able to fully recover,” he said during the seminar on the way Thai could overcome its financial crisis. Bringing foreign experts into the airline’s management would also help to speed up decision procedures and make Thai more in line with world demand.
Meanwhile, the airline continues to struggle to improve its operational costs. On Monday, the carrier announced to offer a voluntary early retirement package to more senior employees as part of a strategy to reduce headcount. Thai Airways currently has 25,000 employees, which represents an average of 10,000 more staff than at Cathay Pacific or Malaysia Airlines, carriers of a similar size. The board will discuss specific packages and offers at its next meeting in May. The early retirement could affect 500 to 700 employees.
In 2013,Thai Airways International lost THB 12.05 billion baht, compared with a profit of THB 6.23 billion a year earlier.
Luc Citrinot a French national is a freelance journalist and consultant in tourism and air transport with over 20 years experience. Based in Paris and Bangkok, he works for various travel and air transport trade publications in Europe and Asia.
