THAI boss insists big losses 'normal'
Thai Airways International plc (THAI) and subsidiaries reported a net loss of 4.68 billion baht in the third quarter of this year and a 10.91-billion-baht net loss for the first nine months, THAI president Sumeth Damrongchaitham said on Friday.
He said such losses were normal for airlines amid fierce competition and price dumping to win customers.
"More than 20 airlines worldwide have shut down [recently], including large ones," Mr Sumeth said.
THAI and its subsidiaries posted total revenue of 45.02 billion baht in the third quarter of 2019. The figure dropped by 6.1% from the same period of last year, he said.
For expenditure, THAI alone (minus subsidiaries) revealed figures of 47.86 billion baht, a fall of 7.8% from last year. Mr Sumeth predicted the national carrier would post losses of less than 3 billion baht in the fourth quarter this year, the high season.
He said during the third and fourth quarters, THAI continued to reduce expenses and increase revenue. He forecast the airline would make a profit next year.
Cost-cutting measures implemented by THAI include postponing unnecessary investments, overhauling work processes to reduce expenditure and improve quality, reducing employee benefits, and encouraging employee awareness and participation, he said.
During the first nine months of 2019, THAI earned 4.6 billion baht in ancillary revenue, aided by data analytics to increase online sales. THAI also has plans to increase revenue from its e-commerce operations, which will be launched later this year. Its new service to Sendai in Japan, launched in October with three flights per week, is 80% booked through to March 2020, he said.
Meanwhile, THAI is proceeding with its transformation plan in 2020, he said.
The plan will identify more high-potential routes based on the Sendai model, while THAI Smile Airways will become a Star Alliance Connecting Partner, strengthening the flight network, the company said. Meanwhile, THAI will hold a marketing campaign with the Tourism Authority of Thailand on their respective 60th anniversaries to boost inbound tourism and increase national revenue, it said.
In October, Mr Sumeth told staff that they must cooperate with rehabilitation efforts because THAI faced possible closure. He later said his statement had been "misinterpreted" and the airline is not at risk.