An article headed “Thai Airways’ finances critical, survival at stake” has jolted readers of the Bangkok Post, the Thai capital’s respected English-language daily newspaper.
The hard-hitting article says Thai Airways International (THAI) has been unable to shake off its financial crisis by increasing revenue and reducing costs. The Bangkok Post is Thailand’s oldest newspaper, in any language.
Thaweesak Koanantakool, saying he met with the THAI board on Monday to check how the financial rehabilitation of the national airline was going – only to learn that the carrier remained in critical condition.
Thaweesak, who heads a sub-committee scrutinising state enterprise solutions, said the management’s hard work had failed to reach vital goals.
Attempts by the airline to slash its costs by 10%, or about THB 10 billion (AUD 390 million) had achieved savings of only THB 2 billion (AUD 78 million), Thaweesak said.
Then he warned: “If this continues, it will not survive.”
The article said the THAI board had been advised “to encourage the airline’s management and staff to work harder”.
Thaweesak praised the airline for reversing losses and generating profits on the cargo side.
THAI president Charamporn Jotikasthira said boosting income and cutting costs was crucial. So were new markets, especially stopover traffic. Frankfurt to Bali was one such route. THAI needed to lift ticket sales on routes like that.
Charamporn conceded that targets had not been met. Tasks set for competition in three months had taken six or seven months. THAI people had never faced challenges of such magnitude, he said, but he was still optimistic the airline would begin to shift back to profit by next January.
Ticket reservations and fuel prices looked promising, Charamporn added.
THAI launched its rehabilitation plan late last year, shortly after Charamporn took office.
THAI saw a net profit of THB 4.54 billion in the first quarter, but the second quarter was dragged down by a one-off payment for the early retirement of 1401 employees, THB 3.67 billion in foreign exchange losses, and a 426-million-baht loss on depreciation of assets and aircraft.
The carrier posted a first-half net loss of THB 8.21 billion, considerably better than the THB 11 billion loss in the same period last year.
Written by Peter Needham