reader Posted October 4, 2019 Share Posted October 4, 2019 From Bangkok Post Rehab plan 'failing' as THAI losses mount Deputy Transport Minister Thaworn Senneam has expressed concern that the loss-ridden national flag carrier Thai Airways International (THAI) may be in danger of running up net losses of well over 10 billion baht this year. He said the financial rehabilitation programme implemented nearly a year ago does not seem to be working, noting on Thursday that the airline reported a loss of well over 6 billion baht in the first half of this year alone. "THAI is now in crisis. Its financial status is in a critical condition. The question is, how well aware is the airline's board chairman about this matter," he added. The deputy minister said he wondered how serious the airline's executives were in discussing and dealing with the worsening financial situation. He said the executives responded poorly to his assignments aimed at easing the carrier's financial woes. Despite his pledge to pull the national carrier out of trouble, Mr Thaworn admitted he lacks the authority to fire its executives for underperforming. He also cautioned the airline about its plan to boost liquidity via a 50.8-billion-baht loan from the government, saying THAI must think carefully before taking such a step with taxpayers' money. "If things go awry, someone will have to be held responsible," he said. The loan request has already been submitted to the Finance Ministry, he said, adding that efficiency of the airline's financial rehabilitation programme will definitely be taken into account when assessing its ability to repay the debt. If the loan is granted, 32 billion baht will be set aside as working capital while the rest would boost the airline's cash flow, said a source at the ministry. The government's public debt management committee, chaired by the finance minister, has expressed concern over THAI's liquidity problem and further debt from a planned purchase of 38 aircraft, said the same source. Mr Thaworn has since ordered revisions to the purchase plan. The committee recommended that the Transport Ministry act to revitalise the airline's finances, said the source. Mr Thaworn said the airline has not yet responded to his question of where it will obtain the loan to finance the 156-billion-baht aircraft purchase. He also queried its long-term business plan for utilising the new aircraft and its marketing strategy to compete with low-cost airlines. That would put THAI in direct competition with low-cost carriers. Mr Thaworn said the national carrier's only strategy to win back customers from budget airlines was to offer customers premium services. The deputy minister said the airline plans to deploy the first batch of 25 new airliners for medium-range flights of 5-6 hours from Bangkok. https://www.bangkokpost.com/thailand/general/1764319/rehab-plan-failing-as-thai-losses-mount Quote Link to comment Share on other sites More sharing options...
PeterRS Posted October 6, 2019 Share Posted October 6, 2019 On 10/4/2019 at 7:11 AM, reader said: The committee recommended that the Transport Ministry act to revitalise the airline's finances, said the source. One of the prime reasons THAI is failing is precisely because the government interferes far too often with the running of the airline. It replaces the Board Chairmen regularly, seemingly at whim, and makes often inexplicable decisions. As with many things in Thailand, part of the reason for the airline's decline is inevitably corruption. It used to have far too many different types of aircraft, no doubt because someone massively benefited from purchasing a batch of a certain aircraft even though not ideal for the route structure. Now it is down to about six different models and should be in a better position to become competitive. Yet its failure to sell its remaining 8 long-range A340s as soon as it ceased flying the transPacific routes was a massive mistake. Years after axing the routes, these aircraft sit idly by at two of the country's airports. Some group of people in THAI should have been fired years ago for allowing this to happen. Now the value of these planes has plummeted and they will soon be worth almost nothing. THAI desperately needs a makeover of all its front end cabins. Some aircraft have been refitted and its first and business class services can be excellent. The problem is that too many have not been retrofitted. Those who can afford the front end want the same competitive hard product but on THAI it is a lottery. Little wonder these passengers are deciding with their feet. Concentrating on some form of competition with low cost carriers is surely madness. THAI already has Thai Smile. Not sure if it still has its stake in Not Air which has also been hemorrhaging cash in recent years. With Hong Kong undergoing long-running protests, its tourism is collapsing. Equally it has one airline teetering on the verge of bankruptcy, Hong Kong Airlines, Cathay Pacific struggling with half full aircraft and Cathay Dragon, its subsidiary which serves many Chinese cities, probably in a worse state. Future transit passengers must surely be wary of booking on these airlines for who knows how many flights will be cancelled if the protests continue. If I found myself with what was scheduled as a 90 minute layover suddenly facing one of 5 hours or even overnight, I would be mightily pissed off. For those who would normally transit in Hong Kong, THAI and BKK should be aggressively marketing themselves as the sensible alternative. If they are, I am not aware of it. splinter1949 1 Quote Link to comment Share on other sites More sharing options...
reader Posted October 11, 2019 Author Share Posted October 11, 2019 They must have been listening to you, PeterRS. From Bangkok Post Deputy Transport Minister Thaworn Senneam has ordered loss-ridden national flag carrier Thai Airways International (THAI) to overhaul its financial rehabilitation plan and draw up a new business plan within 30 days. Mr Thaworn's order comes in response to a recent decision by THAI's board to suspend for six months a plan to procure 38 new aircraft for an estimated 156 billion baht. Speaking after receiving an update on the national carrier's business operations, the deputy minister said he has given the airline 30 days to come up with new financial rehabilitation and business plans. Mr Thaworn also said he has asked the airline to keep him updated on its aircraft purchase programme every month and to expedite a scheme to sell 19 decommissioned planes to cut maintenance costs. https://www.bangkokpost.com/business/1769294/thai-told-to-revamp-rehab-planc Quote Link to comment Share on other sites More sharing options...
reader Posted October 23, 2019 Author Share Posted October 23, 2019 From Bangkok Post Thai Airways at risk of closure, president says Thai Airways International (THAI) president Sumeth Damrongchaitham said on Tuesday that staff must cooperate with the airline's rehabilitation efforts because it is in a crisis and faces possible closure. He sent his message to THAI executives during a training session at the airline's headquarters. "Today I want staff to be united to overcome the obstacles. Otherwise, the national airline must close down. There is still time for a solution, but there is not much time," Mr Sumeth said. "The competition is very fierce this year," Mr Sumeth said. "THAI is really in a crisis. Next year it must do its best. If staff are still unaware and do nothing, they will not have enough time to fight back. Today very little time remains. Today there is no comfort zone. Everyone will die if the vessel sinks," . THAI would cut costs by reducing the salaries of managerial staff and following a zero inventory policy at its catering department, he said. He said that THAI had lost its market leadership on several routes to competitors, citing northern routes that had generated a third of THAI's revenue but were now dominated by low-cost airlines. https://www.bangkokpost.com/business/1777704/thai-airways-at-risk-of-closure-president-says#cxrecs_s Quote Link to comment Share on other sites More sharing options...
