The national carrier Thai Airways International Plc (THAI) will offer a voluntary early retirement package to older employees as part of a strategy to reduce headcount and improve efficiency in its operations.
THAI acting president Chokchai Panyayong said the board met Monday to consider the restructuring of the overall organisation and employees, in order to modernise and prepare for tougher competition in the future.
The company aims to cut the number of employees, currently 25,000. The goals are to match employees to operations by reducing the average age of staff, and matching employees’ skills with their jobs.
The financially ailing Thai Airways will offer early retirement packages that were approvied in principle at the meeting, he said.
He did not give further details. He said the board will discuss specific packages and offers at its next meeting in May.
The Post Today reported on Monday that one package will be a lump payment of 30 months' salary plus 10 months as motivation. Another, the newspaper reported would be payment of 20 months' salary, plus the 10-month bonus, and future medical expenses. It will take THAI around two to three years to break even from implementing the project, it added.
Mr Chokchai said he expects the early retirement programme, due to be started within 60 days, would help reduce the payroll by some 500 to 700 employees.
Damrong Waikanee, chairman of the THAI Labour Union, said initial discussion with employees showed that many are interested in an early retirement scheme, because they are not confident in the future of the airline, based on its performance. He said some junior staff want to move to other organisations, while senior staff likely would use their severance packages to start small businesses, the Post Today report said.
A majority of employees, however, have shown disagreement with the overall initiative to restructure THAI, claiming it had too many loopholes to continue nepotism and fail to improve the operation.
Earlier last week, Banyong Pongpanich, chief executive officer of Phatra Security Plc and former THAI board member, said the airline has an operating fund of 56 billion baht, but an accumulated debt of 250 billion baht.
The airline faces critical debt in the next six months if nothing is done to solve the problem, he warned.
During 2013, the company lost 12.05 billion baht, compared with a profit of 6.23 billion baht in 2012, according to information published on the Stock Exchange of Thailand.