Thai Airways International (THAI) president Sumeth Damrongchaitham has voiced serious concern about the loss-ridden national airline's future, the Bangkok Post reported. In a message to THAI executives, Khun Sumeth said that staff must cooperate with the airline's rehabilitation efforts because it is in a crisis and faces possible closure.
"I want staff to be united to overcome the obstacles. Otherwise, the national airline must close down. There is still time for a solution, but there is not much time," Khun Sumeth said.
He said that THAI had lost its market leadership on several routes to competitors, citing northern routes that had generated a third of THAI's revenue but were now dominated by low-cost airlines.
"The competition is very fierce this year," Khun Sumeth said. "THAI is really in a crisis. Next year it must do its best. If staff are still unaware and do nothing, they will not have enough time to fight back. Today very little time remains. Today there is no comfort zone. Everyone will die if the vessel sinks."
Revised fleet policy
The Bangkok Post quoted Khun Sumeth as saying that THAI would cut costs by reducing the salaries of managerial staff and following a zero inventory policy at its catering department. "There will be no other rewards for the staff, because the top prize is the survival of the company," Khun Sumeth said.
In the first half of this year, THAI posted a loss of 6.44 billion baht, raising its accumulated loss to 280 billion baht. It employs more than 20,000 people.
Last month, the THAi president announced that the airline will revise its plan to procure 38 planes after its board shot down a proposal to buy them, and leasing is now an option.
Shutdown announcement – just a trick to discipline staff?
"THAI will review its aviation plans and existing fleet, as well as the decommissioning of its planes and the number it needs. These must be in line with its financial plan," he was quoted as saying by the Bangkok Post.
"If we still need 38 planes, do they need to be of the same sizes or will the cost change? Plane procurement doesn't necessarily mean they must be bought. They can also be rented," Khun Sumeth argued, adding that in the short term, THAI will need to lease at least three planes to replace some of its 20 aircraft to be decommissioned.
Media misunderstood the Thai boss, he claims
Following his message to THAI executives, Khun Sumeth walked back his statement about a possible closure and insisted that earlier remarks made during a discussion with executives had been "misinterpreted" by the media. Instead, he told the Bangkok Post, the remarks were to encourage staff to make an all-out effort to ensure the struggling airline's rehabilitation plan succeeds. He rejected the possibility of the flag carrier closing down, but admitted having to battle stiff competition, including from low-cost carriers.
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