Increase in revenue, cost reduction critical for THAI: Thaworn

TUESDAY, JANUARY 28, 2020
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Deputy Transport Minister Thaworn Senneam discussed the open sky policy and emphasised the importance of increasing revenue and reduction of expenses for Thai Airways International Pcl (THAI) to turnaround its fortunes and become a sustainable operation in the future.

Thaworn, Jua Ratchasri, assistant secretary at the Ministry of Transport, along with other officials visited THAI's headquarters to follow up on policy implementation and take stock of the situation.
Thaworn also looked at operational problems and obstacles faced by THAI in improving its financial results and becoming one of the world’s leading airlines. He followed up on the ministry’s policy, such as turnaround plan and business plan, acquisition plan for 38 aircraft, company management and structure, the U-Tapao aircraft maintenance centre, plans to boost revenue and operating results. Additional policies were also presented, such as human resource management, managing company property to extract maximum benefit, manage and improve sales and marketing between THAI and Thai Smile.
THAI president Sumeth Damrongchaitham said they were acting on the policies issued by the Transport Minister, which will be used in resolving accumulated financial losses and achieving longstanding profitability. He said progress was being made on some of the projects.
THAI is reconsidering its long-term plan for 2019-26 to acquire 38 aircraft. THAI’s board of directors approved the plan to acquire the aircraft to replace 17 aircraft that will be decommissioned, which must be suitable for the financial situation and altered conditions. The management will study aircraft types and present the results to the board in February 2020. The company will present information on the number of aircraft, acquisition methods and investment sources for consideration of the board at their meeting in March. This plan will help the company to grow continuously and not be a financial burden. It will be presented to the Ministry of Transport by March 31.
Regarding the Maintenance, Repair, and Overhaul Centre (MRO), THAI has sent information on bidding to investors. The deadline for submission of proposals is March 6, to enter into the negotiation process, conclude the selection results and draft the Public
Private Partnership Agreement (PPPA) that would be submitted to the Office of the Attorney-General and the Eastern Economic Corridor (EEC) Policy Committee. After that it will be proposed to the Cabinet in August. The company expects to sign the PPPA with the bid winner by the end of August. It is expected that the new MRO centre at U-Tapao will be operational by April 2023.
Meanwhile, negotiations are going on between the THAI and Rolls Royce over demand for damages. THAI is seeking compensation from Rolls Royce for the period THAI’s aircraft was not operational as they were awaiting spare parts, resulting in damages and lost business opportunities.
The company is working on increasing revenue according to the Middle Turnaround Plan (2020-24) through innovation and digital technology, implementing modern technology in various projects such as TG Digital Technology, sales development plan and boosting of ancillary revenue in order to improve online sales. 
THAI is in the process of implementing cost reduction and cost control as well as organisational restructuring.