Ailing Thai Airways moves to cut costs, increase revenue
published : 13 Aug 2019 at 12:25
writer: Thodsapol Hongtong
Loss-ridden Thai Airways International has announced steps to cut expenditure and increase revenue, in a bid to tackle its accumulated debt of 100 billion baht.
THAI president Sumeth Damrongchaitham said on Tuesday intense competition had affected all airlines’ operating results, and was coupled with recurring issues they were trying to rectify.
In the 11 months he had been in the job, "there was never a day without a problem", he said.
The national airline had been hit by external crises such as the strong baht, US-China trade war, sluggish global economic and the closure of Pakistani airspace. As a result, tourists numbers declined and customer purchasing power reduced, in addition to delayed engine repairs by the manufacturer.
Management recently brainstormed ideas to establish guidelines to increase revenue and reduce expenses as quickly as possible.
As a result, the following strategies will be implemented:-
1. SaveTG Co-Creation: A cost-control strategy that does not hinder THAI’s quality of service. The company’s cost reduction plan allows employees to propose ideas and suggestions to the management team, and more importantly grants passengers the opportunity to suggest solutions for the company through Co-Creation at firstname.lastname@example.org.
2. Zero Waste Management: A project to help save and create a circular economy for both the organisation and the nation as a whole, starting with food waste. The airline is cooperating with FoodInnoPolis to develop an action plan.
3. In the fourth quarter, a new marketing strategy will be implemented with direct flights to Sendai, a beautiful city in the Tohoku region of Japan.
4. Strategy to Increase Revenue: Utilise digital marketing, such as promotions in the digital media on a regular basis in order to better serve online customers, who can download the Thai Airways mobile application to make reservations, search for flights and promotions. This increases revenue by selling ancillary products, such as increased excess baggage allowance, travel insurance, airport limousine service, car rental and hotels, and has added languages available.
5. THAI Synergy Strategy: To offer the company's products and services through business alliances, currently a collaboration with Café Amazon, to expand business in Thailand and the Asian region.
6. TG Group Strategy: To make THAI and THAI Smile stronger together with a route network that offers systematic connectivity for passenger convenience, to be implemented regionally during the fourth quarter this year.
“I have been President of THAI for 11 months and there was never a day without a problem," Mr Sumet said.
"Members of the THAI board of directors, management, and staff recognise THAI as a national carrier and we have all been working hard, as the problems that we face cannot be easily solved.
"With these ... strategies, we believe THAI will return to its position as one of the top world class airlines, although not as soon as we hoped. This all depends on the support of Thai passengers who still love THAI, who can help by flying with our airline, use our services, and by making recommendations under the #SaveTG concept. All employees and I are confident that we will accomplish our goal,” he said.
THAI also adjusted its work structure, with THAI Smile Connectivity to be centralised in order to increase passenger convenience, and implemented corporate business ethics throughout the organisation to strengthen unity, which is one part of the whole #SaveTG master plan, he said