THAI Airways told to slash costs

THAI Airways told to slash costs

Execs' remaining perks face the axe

Thai Airways International (THAI) is being ordered to cut more costs, especially any remaining perks offered to its executives, Transport Minister Arkhom Termpittayapaisith said Tuesday.

The cost-slashing measures are part of the cabinet's resolution reached on Oct 27 for all state enterprises to submit a plan to tighten their belts and simultaneously generate more income, the minister said.

The cabinet has also set a 30-day deadline for state enterprises to submit their plans, particularly THAI, which also needs a financial rehabilitation plan to tackle its substantial losses, Mr Arkhom said.

Two other state enterprises facing the same fate as THAI are the Bangkok Mass Transit Authority and the State Railway of Thailand, he said.

Aside from the rehabilitation plan, THAI is also required to come up with an organisational restructuring plan, he said.

The current organisational structure of THAI was found to be inappropriate for its staff numbers and their work responsibilities, he said.

THAI is a large organisation with a huge cost burden comprising gigantic perks offered to high-level executives who, however, were found to have "ridiculously low responsibilities", said the minister.

Despite a previous restructuring of the organisation in which more than 77 executive positions were reshuffled, THAI had not achieved any significant cost cutting so far, he said. That was why the previous restructuring plan needed to be reviewed to find new and more practical ways to boost the financial position of the airline, he added.

However, the minister said the high salaries and work benefits of high-level executives and board members do not constitute the main financial burdens facing the national carrier.

Citing a report by the Office of the Auditor-General, he said that over the first half of this year, THAI board members had received almost nothing when it came to perks.

"They no longer receive free air tickets [which they used to get]. All they get now are meeting allowances that do not amount to that much," Mr Arkhom said.

According to the minutes of THAI's annual plenary session on April 29, 2014, THAI decided to stop giving its board members their usual 10 return tickets on international routes each year. This means they only now receive 10 return tickets on domestic routes a year.

As for the monthly salaries and meeting allowances of board members and managing executives, the minutes show they currently receive 50,000 baht each a month plus a fixed meeting allowance of 30,000 baht per person per month.

The board chairman receives a 25% higher meeting allowances than other board members while the deputy board chairmen get 12.5% more, according to the minutes.

Even in months when they do not have a meeting to attend, they still get the allowances, the minutes said.

Mr Arkhom also raised questions over why the THAI president, who is paid about 900,000 baht a month, has to hire a foreign adviser for 10.5 million baht for a six-month period.

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