THAI AIRWAYS TO WITHDRAW FROM US
Thai Airways International Plc plans to cut 1,401 jobs through voluntary retirement this year and suspend its loss-making flights to Los Angeles and Rome as it pushes ahead with a restructuring plan, its president said on Sunday.
Thailand’s national carrier aims to reduce operating costs and capacity by 20 per cent under the two-year plan, which also calls for aircraft sales and a reduction in staffing.
The firm is one of several state-controlled companies that the military government has targeted for reform since seizing power in May 2014.
The flight suspension will reduce THAI’s capacity by 5 per cent, president Charumporn Jotikasthira said. The company aims to cut capacity by 15 per cent during the second half.
“It’s normal that we have to cut costs and adjust flights to suit the changing situation,” he said.
The airline has set a budget of Bt5.3 billion for the voluntary retirement scheme.
The number leaving excludes those reaching retirement age this year.
THAI aims to cut operating costs by up to Bt9 billion this year.
On October 25, the carrier will stop flying from Bangkok to Los Angeles and Rome. The routes cost the company more than Bt100 million a year.
The flight suspension to Los Angeles will close THAI’s operations in the United States. The firm suspended flights to New York in 2008, also because the route was unprofitable. But the flagship carrier will double flights to London and Frankfurt to twice daily.
To further reduce costs, THAI will cut the frequency of its flights to Kolkata, India. It will also transfer operations of three routes, Hyderabad in India, Changsha in China and Luang Prabang in Laos, to its Thai Smile mid-range unit.
THAI’s operation will break even at the end of this year, although the bottom line would be impacted by rising restructuring costs. |– REUTERS
MITSUBISHI MOTORS TO FOCUS ON ASEAN
The president of Mitsubishi Motors Corp said yesterday that Japan, Southeast Asia and Russia will become the automaker’s principal production hubs after it calls time on making cars in the United States later this year because of dwindling output there.
“Japan, Asean and Russia will be the main points of production for our company,” said Tetsuro Aikawa, president and chief operating officer of Japan’s sixth-biggest automaker.
Aikawa was speaking at a news conference after his company confirmed plans to end output at its sole North American plant in Normal, Illinois and serve the US market from factories in Japan and Thailand.
The shift comes as Mitsubishi Motors increasingly focuses output in Southeast Asia, where its pickup trucks and sports utility vehicles (SUVs) are popular. The automaker makes cars in Thailand and the Philippines, and said in February it will build a factory in Indonesia for vehicles such as its Pajero Sport SUV.
The move to pull the plug on the Normal factory – opened in 1988 as a joint venture with its then partner Chrysler – was prompted by low-volume production rather than shifts in foreign exchange rates making exports from Japan cheaper.
– REUTERS
