After three straight money-losing years, Thai Airways International (THAI) will turn a profit next month thanks to stronger sales and cost-cutting, the flag carrier’s president said on Tuesday.
Charamporn Jotikasthira said THAI hired foreign consultants to help improve marketing because 65% of the airline's revenue originated in other countries. Overseas experts also are working on THAI's restructuring and streamlining of business processes, he said.
Passenger load factors have hovered around 73% for a long while, but that should improve to at least 80%, Mr Charamporn predicted.
He admitted the cost of hiring foreign consultants was high, but their employment would be limited to four years.
Profitability would return also because THAI cut costs by implementing early-retirement schemes, decommissioning 20 old planes, closing four overseas sales offices and terminating four routes. Those measures would lower THAI's expenses in 2016 by about 5 billion baht.
In June, THAI will introduce new business processes to manage routes, flight schedules and ticket prices to increase profitability, Mr Charamporn said.
THAI executive vice president for finance Narongchai Wongthanavimok said the airline cut its costs by about 8 billion baht this year, partially through a reduction in weak-performing routes.
In 2015, THAI sold 24 planes and earned 3-4 billion baht. It would sell 14 more in 2016, he said.
Business was strong in the fourth quarter, likely preventing THAI from breaking its dubious record for annual losses of 21.3 billion baht, Mr Narongchai said.
On Monday, the THAI board approved sales of airline property worldwide. Most were sales offices and staff dormitories in countries where THAI discontinued service.
They included properties in Denmark, Indonesia, Singapore and Spain. Local properties to be sold were in Mae Hong Son and Phitsanulok provinces, Mr Narongchai said.
The sales should help reduce THAI's debts which stood at about 200 billion baht, he said.