Thai Airways International finally announced the name of its new President, media veteran Sorajak Kasemsuvan. He will take his position in October. However, the new President will be confronted to the same old woes: slow decision process and changing strategies due to the permanent interference of Thai politics into the airline’s management…
BANGKOK- Pomp and circumstances! For an outsider, the function of President at Thai Airways International seems to be all about glamour and prestige. But from an insider, the position is one of the most difficult to hold. A State carrier, Thai Airways is plagued by several weaknesses: decisions are slow despite sweeping changes in the air transport industry, the airline is overstaffed- due to Thai status of an employment agency for influent families- and there is little strategic visibility as Thai Airways changes its president at the same speed than take-off and landing at a busy airport– this is already the fifth president filling the seat over the last 12 years.
To be blamed is not some of the management but more the airline’s structure. Thai Airways’ biggest puzzle remains the State. The airline still stands in majority (51%) in the hands of the Ministry of finances, in fact the real manager of the airline. Thai Airways President has no power to take the right decisions in terms of fleet, expansion, strategic partners to invest or cost reductions without being forced to get the endorsement from the Board of Directors –generally put in place by Thai politics. The Board of Directors is far of being competent BUT they retain the power… This situation was experienced by the former TG President Piyasvasti Amranand – a rather competent personality- who finally was fired by the Board of Directors , probably as he was judged to independent.
So far the airline survived crisis better than its counterparts in Malaysia or in the Philippines as the State provides continuous support to the carrier and insidiously limit competition. For example, all Thai public companies and Thai administration are requested to fly Thai Airways on business assignment – some insiders indicate that fares from the competition have to be 35% lower than TG to allow those public companies to switch to another airline.
But will it be enough as air transport changed dramatically in Asia and Thailand over the last decade? Thai is losing market shares in its own market –especially on regional routes- as it failed until recently to recognize the effect of the low cost airline’s revolution in this part of the world. The airline is probably one of the last in the world not to use the principle of yield management when selling tickets on line. Fares are all the same all across the network whatever the date of travel… Another way to lose more potential passengers, especially as everyone shops now online to find the best available fares!
Future THAI President Sorajak Kasemsuvan was the former chairman of the majority state-owned broadcaster MCOT. He holds a Ph.D. in international law, worked for the BBC’s Thai-language service and has been a vice-minister in Thailand’s Foreign Ministry. He seemed an experienced personality but that might not be sufficient for Thai Airways. The designated President will have to prove all his management’s skills to navigate between the requirements of the Board of Directors, Labour unions and passengers’ demand. He is due to start in his new role by October. Good luck Mister President!
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.
