THAI finances 'critical', panel member says

THAI finances 'critical', panel member says

Misjudging the 2011 floods and losing planes at Don Mueang airport was a watershed event, when Thai Airways International began to bleed money. (Bangkok Post file photo)
Misjudging the 2011 floods and losing planes at Don Mueang airport was a watershed event, when Thai Airways International began to bleed money. (Bangkok Post file photo)

The financial health of Thai Airways International (THAI) remains critical, a senior member of a committee that oversees the airline says.

Thaweesak Kaonantakool, of the State Enterprises Policy Commission known as the "super board", said the airline's rehabilitation measures have not improved its bottom line.

Mr Thaweesak said the national carrier is "not yet in the clear" despite its management's efforts to reverse the dire situation.

Under the rehabilitation plan, THAI intends to improve its finances and return to profitability in January. 

The plan involves suspending unprofitable flight routes, adjusting marketing strategies, selling assets and unused aircraft, restructuring manpower including a massive early retirement programme and improving non-core businesses.

The company plans to have 1,400 staff enter early retirement by this year as a part of its long-term plan to cut 5,000 staff in total. THAI is also considering cutting flights on loss-making routes by 5% from October this year to March next year.

The company's target is to slash between 8 and 9 billion baht in costs this year.

Mr Thaweesak said the review of the implementation of the rehabilitation showed that the airline's operations in the third quarter fell short of target especially in the area of cost reduction.

While the airline was supposed to reduce costs by 10 billion baht, it managed to cut only two billion baht, he said. Moreover, revenue generating was also below the target.

"If things continue like this, it won't be good," he said.

Mr Thaweesak's remarks came after the committee's meeting with THAI's board on Monday to review the airline's implementation of its rehabilitation plan.

THAI president Charamporn Jotikasthira said yesterday the restructuring programme was progressing, but the airline had not yet cut costs or increased revenue.

Mr Charamporn said there was time to improve the situation if efforts were intensified in the remainder of the 18-month rehabilitation programme which was designed to strengthen the company's ability to be competitive.

He said the airline's business section has started to target routes which fly over Thailand such as Frankfurt to Bali. The measure is expected to significantly boost ticket sales.

"After this we will focus on measures to increase revenue. The plan is good and doesn't need any revision. We just intensify our efforts," he said.

Mr Charamporn said the airline's target that it would become profitable in January remained unchanged.

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