Airline News
THAI shake-up turns nasty
April 27th 2015
Former THAI Airways International (THAI) executives have petitioned transport minister, Prajin Juntong, asking why the national carrier is wracked by heavy losses. They are questioning major board decisions dating back to 2009. Read More » Yothin Pamon-Montri, a former executive and shareholder of THAI, said some shareholders were growing increasingly concerned about the airline’s 29.6 billion baht ($912 million) in losses accumulated over the past seven quarters, adding the group had conducted its own performance assessment of the board and the document containing that evaluation would be sent to board chairman, Areepong Bhoocha-oom, and THAI president, Charamporn Jotikasthira. Copies also will be delivered to Thailand’s prime minister, Prayut Chan-o-cha, finance minister, Sommai Phasee and Stock Exchange of Thailand president, Kesara Manchusree.
Speaking to the Bangkok Post, Yothin said a major problem was with NokScoot, a joint-venture of Thailand’s Nok Air and Singapore Airlines (SIA)-protégé Scoot, which was allowed to operate routes already in THAI’s own network, raising questions over a conflict of interest. Yothin and his supporters asked why THAI did not oppose NokScoot's operation in the first place, saying Singapore Airlines, which holds a 49% stake in NokScoot, benefitted from the venture while THAI had no benefit from it.
Another former THAI executive and shareholder, Suthep Suebsantiwong, told the Thai daily he wanted the board to disclose information about the hiring of U.S.-based consultancies Bain & Company and L.E.K. The latter was appointed in 2009 and, amongst other proposals, had supported the launch of THAI Cargo, a venture eventually declared a failure after producing more than 572 million baht in losses amid the global recession of the cargo business. THAI Cargo has exited the sector and its two B747-400 freighters remain parked at Bangkok’s Suvarnabhumi International Airport.
Boston-based Bain & Company helped devise THAI’s “Shrink to Growth” rehabilitation plan, but according to Suthep, there was a possible conflict of interest as an executive of Bain was found to have also worked for L.E.K. and Temasek Holdings, SIA’s owner. Both THAI and SIA declined to comment on the matter.
