By THE NATION
He said the subsidiary, which positions itself as a premium airline, had carried out a major restructuring programme of its operations, aimed at cutting operational cost and teaming up with THAI in both sales and marketing. Thai Smile will keep its positioning as a premium low-cost airline and become a feeder service provider for the Star Alliance network.
Meanwhile, Sumeth said: "On behalf of Thai Smile's chairman, I will launch the largest-ever financial restructuring of the carrier in compliance with the new IFRS9 accounting system, effective by 2020. However, I cannot reveal whether it will be a rise in capital, but the resulting benefits will lead to an improvement in the carrier's performance, higher confidence and the start of in-bound routes directly to many potential markets, such as the Philippines," he said.
THAI, as a 100-per cent holder of Thai Smile, implemented the restructuring programme recently in the areas of ticketing, marketing and the arrangement of routes to complement each other's flight schedule. By doing so, Thai Smile will have better cost management.
"We believe that by the end of this year, Thai Smile will have significantly reduced its loss. THAI suffered a Bt3.6 billion loss from holding all shares in the subsidiary and its related businesses last year with the net loss of Thai Smile itself amounting to Bt2.6 billion ," said Sumeth.
For this year, THAI has estimated a loss of Bt1.6 billion to Bt1.7 billion from Thai Smile, down 50-per cent from last year's, he said.
"The capacity of Thai Smile has been raised from 8.30 hours per aircraft per day to about 9.30 hours. By next year, we plan to further increase the capacity to 10.30 hours per aircraft per day, which will be the breaking point for Thai Smile. By then, it will no longer incur a loss," said the THAI president .
He said Thai Smile had joined Star Alliance, the premium aviation network and the connection with its global system would be completed by the end of this year. It will allow Thai Smile to link up its routes with major international airlines', giving it an opportunity to operate as a feeder carrier for passengers coming to Thailand. There are currently many airlines showing interest in joining up with Thai Smile, including Air France.
"The entry of Thai Smile to the Star Alliance will reinforce its stand point as a premium airline which will also serve as a feeder carrier for other airlines in the network. I believe that by managing its cost systematically, Thai Smile will turn around and THAI will have a better overall performance," said Sumeth.