Board must explain dismissal of Thai Airways president

The dismissal of Piyasvasti Amranand as president of Thai Airways International (THAI) was somewhat surprising yet not completely unexpected. After months of speculation about the possible sacking of the top executive at the national carrier, the THAI board decided to dismiss Piyasvasti by reasoning that he had a problem in communicating with the board.

Of course, the decision by any company to sack its president is up to the board of directors. But the THAI board should have better communicated with the airline’s union and the general public to clear up any doubts that either may have had regarding the dismissal. 

First of all, the THAI board has a duty to be fully accountable to the public because more than half of its shares are still held by the Finance Ministry and were paid for with taxpayers’ money. In addition, the board has the duty to protect the interests of all shareholders and stakeholders in the national carrier.

Changing the top executives at state enterprises and corporations seems to be the norm with any change of government. In this case the market has, for some time, expected to see the dismissal of the THAI president. After all, Piyasvasti was selected under the previous Democrat government. Piyasvasti himself has denied any political allegiance with the Democrat Party or that his appointment was politically motivated. THAI board chairman Ampon Kittiampon has said that the dismissal does not have any political motive. But that statement will not end public speculation over the dismissal.

Rumours were swirling around for months that Piyasvasti’s dismissal was imminent, even though Piyasvasti has reasonably fulfilled his duties as the airline’s president. Jamsri Sukchotirat, president of the THAI labour union, said Piyasvasti’s removal did not make sense, considering that Piyasvasti has been in constant communication with the company’s staff, especially regarding the financial performance and profitability of the airline.

Now, the burden of selecting a suitably qualified person to head THAI will have to be made, if the board indeed considers that Piyasvasti was not up to the task. It now falls to the board to make a decision that will help to keep the national carrier competitive. 

THAI will be facing stronger competition not only from regional national carriers but also the burgeoning number of low-cost airlines. The aviation battle is expected to become ever more intense with the ongoing economic troubles in Europe and fluctuating fuel prices. 

Piyasvasti should receive some credit for turning around THAI’s business. He had a high key performance indicator (KPI) rating of 4.3 per cent out of 5 per cent for this year, although the score is down slightly from last year’s 4.6 per cent. If Piyasvasti had a communication issue with the board, as has been cited, such an issue did not seem to reflect on the THAI balance sheet, which saw good profits under his watch.

While the board needs to communicate with the union and the public over the reasons for Piyasvasti’s dismissal, it must, at the same time, recruit the right person to head the national carrier. And the reasons should be well communicated to stakeholders to promote transparency.

THAI will need a president with solid business experience, capabilities and vision to drive the national carrier forward in the face of fiercer competition and turbulence from external factors such as the global economic slowdown. Therefore, the board’s decision must be well considered if the public is to be convinced that change has been made with the best interests of the public and stakeholders in mind, not simply in response to the winds of political change.