Thai Airways' finances critical, survival at stake
published : 20 Oct 2015 at 17:55
writer: Amornrat Mahitthirook
Thai Airways International (THAI) remains in a financial crisis as it has been unable to increase revenue and reduce costs as urgently needed, a member of the State Enterprise Policy Commission said on Tuesday
Thaweesak Koanantakool, who heads a sub-committee scrutinising state enterprise solutions, said he met with the THAI board on Monday to discuss progress in the financial rehabilitation of the national airline, and learned that it remains in critical condition.
The management had worked hard, but goals were missed. The airline intended to cut costs by 10%, or about 10 billion baht, but managed only 2 billion baht. "If this continues, it will not survive," Mr Thaweesak said.
The THAI board was advised to encourage the airline's management and staff to work harder. However, Mr Thaweesak praised the airline for reversing losses and generating profits from its freight service.
THAI president Charamporn Jotikasthira said the airline had to try harder to increase income and cut costs, and that would include efforts to enter new markets such as ticket sales on routes where Thailand was not a destination but a stopover. He cited a route from Frankfurt to Bali.
"Targets have not been reached because work remains slow. Some tasks should have taken three months to start, but actually took 6-7 months... Thai Airways people have never before handled so many tasks, and such huge tasks," Mr Charamporn said.
He still hoped the airline would start to post a profit from January next year, saying ticket reservations and fuel prices were promising.
The national carrier launched its rehabilitation plan late last year, shortly after Mr Charamporn took office.
THAI posted a first-half net loss of 8.21 billion baht, an improvement over the 11-billion-baht loss in the same period last year.
The first quarter saw a net profit of 4.54 billion baht, but the second quarter included a one-time special expense for the early retirement packages of 1,401 employees, 3.67 billion baht in foreign exchange losses, and a 426-million-baht loss on impairment of assets and aeroplanes.
It posted shortcomings in the third quarter, Mr Thaweesak said.