THAI executives cut their benefits
Top executives at Thai Airways International have agreed to cut their annual pays, as part of the company's cost-cutting plan in light of steep loss in the past year.
As part of the cost management strategy initiatives acknowledged by the board of directors today, the president, executive vice presidents, and managing directors have agreed to an 11 month pay for fiscal year 2012. They would also cut annual vacation period from 28 days to 24 days.
Piyasvasti Amranand, the president, will also waive meeting allowances for participation in Board meetings and other executive management meetings. Members of the Joint Management & Employee Relations Committee will also forego meeting allowances through 2012.
The initiatives, aimed to cut cost by Bt602.45 million per year. They aim to reduce allowances outside of basic salaries, taking three key considerations into account: the sustainability of the national carrier, fairness to all employees, and benefit to all stakeholders.
The plan has been approved by the THAI Executive Management Committee and the Joint Management & Employee Relations Committee and is being implemented for 2012.
THAI is expected to show billions of loss for the 2011 operations. While the Available Seat-Kilometer (ASK) was 3.9 per cent higher than the same period last year, the Revenue Passenger-Kilometer (RPK) was 0.7 percent lower than the same period last year. Cabin factor averaged 70.4 percent, which was 4.4 percent lower than the same period last year.
In December alone, the cabin factor averaged 68.1 per cent which was exceptionally weak especially for the peak season. The decrease in passenger number was attributable to the recent flood.
On a positive note, the cabin factor for January 1-16, 2012 is 78.7 per cent on average (mainly from European and Australian routes), which is an increase from the same period last year. Reservation for the second half of January averages 77 per cent capacity.
THAI board also approved the issuance of Bt3 billion bonds via a private placement. The proceeds from the Bt1 billion 7-year bonds and Bt2 billion 10-year bonds will be used in the company’s operations, for asset investments, and retiring high-interest loans. Bank of Ayudhya will be the lead underwriter.
