THAI told to ride out the turbulance

"The airline is facing tough competition due to more players in the market especially low-cost carriers. Budget airlines and premium rivals are stealing THAI’s passengers through their attractive promotions," a shareholder told the airline’s executives at the annual meeting last Friday.

The airline must draft a new strategy and initiate proactive marketing campaigns to regain passengers.

The state enterprise should also give shareholders some assurances that its financial status was viable, the shareholder added.

Another shareholder urged the airline’s executives to reduce or end management by third parties especially politicians because these people have come and interfered with operations.

That is proven to have caused losses and damage for more than 10 years. Instead, the airline should have full decision-making independence to run its business, the shareholder said.

THAI’s management was also questioned by shareholders over the establishment of NokScoot.

They wondered why THAI allowed its sister airline, Nok Air, to form NokScoot with a foreign partner instead of a local partner, reasoning that the new airline’s income would not be added to the Thai economy, but would go to Singapore. A group of shareholders is preparing plans to frame this issue.

The disposal of old aircraft was also raised at the meeting, which noted that some other airlines such as Etihad were also placing aircraft on the market at very competitive prices. If all of the old planes cannot find a buyer, they can be pawned at a local bank for cash, they said.

Charamporn Jotikasthira, president of THAI, conceded that the airline lost a whopping Bt15 billion last year. It was also in the red the year before that. The airline has had to suspend dividends, but he insisted that its financial status and performance would improve this year.

THAI’s average load factor climbed from 67 per cent last year to 76 per cent last month and has already gained altitude to 77 per cent this month. The airline expects to start seeing profits in the first quarter of 2017.

It is carrying out its restructuring plan including decommissioning ageing aircraft, slashing aircraft types from 11 to eight and cutting costs through an early retirement programme for staff.

It has scaled back its summer traffic programme by suspending the Bangkok-Moscow and Phuket-Seoul routes and loss-making routes such as day flights to London and Frankfurt.

Aircraft types have been adjusted to meet market needs. Madrid, Spain, will also be dropped from its destinations on September 5.