THAI details business reforms in bid to fly out of the red
Thai Airways has informed the cabinet that its business recovery is progressing and provided details at a meeting.
The airline had earlier established a committee to spearhead the reduction of its debt to an appropriate level in an attempt to fly the group out of the red.
Government deputy spokeswoman Ratchada Thanadirek said on Tuesday that the Cabinet had received the report, which revealed 10 important adjustments:
- A reduction in the number of planes – which were old, inefficient or not cost-effective –from 116 to 58.
- Adjusting its business structure: reducing the company's payroll by 23.1 billion baht from 2019, reforming the work process, reducing the number of rented/hired aircraft, decreasing the types of planes from eight to four, and adjusting working regulations.
- Reforming the organisation structure and reducing its size; Scaling down the number of personnel from 29,500 in 2019 to 15,200.
- Reforming the business as a whole: the airline aims to reduce expenses by 53 billion baht per year starting with 2022.
- Finding revenue from other sources: shipping and selling food and drinks.
- Planning network routes to important cities in each region: Thai Airways has jumped aboard with other partner airlines to connect flights to cities to generate extra revenue.
- Selling secondary assets: the airline has sold or is selling the stocks of subsidiaries, land and training centre in Lak Si district, land and buildings in Chiang Mai and Phuket, and its Larn Laung office. Thai Airways is also selling unused real estate and aircraft in Thailand and foreign countries.
- Finding a new source of revenue.
- Adjusting its debt structure.
- Making a net profit of 11.12 billion baht from January to June 2021, but witnessing operational losses of 14.33 billion baht. Thai Airways has earned revenue of 25.89 billion baht from adjustments in its debt restructuring and adjusting its aircraft renting/hire purchase contracts.
Ratchada said Thai Airways is finding a new source of income in the form of credit amounting to 25 billion baht from financial institutions to support the company’s business recovery in 2022. A contract for the purpose is expected to be signed this month.
