News
THAI facing industrial action?
November 27th 2015
Embattled Thai Airways International (THAI) has assured staff it plans no salary cuts for middle management and line workers, following speculation that ground staff would launch industrial action in response to the carrier’s cuts to employee benefits. Read More »
"Everyone who is planning to fly THAI on Thursday should come early since flights may be delayed as ground staff will strike," a message sent via LINE groups of THAI staff said.
Capt Kanok Thongphueak, deputy THAI president for human resources and company affairs, rushed to deny the speculation and said it was causing "serious damage" to the airline. He insisted there would be no salary cuts for employees other than the nine top executives who had volunteered to have their wages cut by 10% in months the flag carrier produced red ink.
In mid-November, THAI posted 9.89 billion baht ($275.2 million) in losses for the third quarter ended September 30, of which 4.23 billion stemmed from operations and 4.63 billion from exchange rate fluctuations and impairments of assets and aircraft. This translated into 18.1 billion baht ($504 million) in losses for the first nine months combined, up 97.2% year-on-year, and increasing the likelihood the carrier's losses this year could equal or exceed its all-time high of 21.3 billion in 2008.
Thai prime minister, Prayut Chan-o-cha, is "dissatisfied" with the first-year performance of THAI chief, Charamporn Jotikasthira. Government sources are suggesting he could be axed in six months if he failed to stem the carrier’s losses.
Analysts remain sceptical about THAI’s revival. Thailand’s Bualuang Securities projected the airline would 20 billion baht this year, 3.38 billion baht in 2016 and 1.59 billion baht in 2017. Earlier this month, Bualuang downgraded its stock recommendation for THAI from ''hold'' to "sell". In the year to date, THAI’s stock has plunged 35%, while Thai AirAsia, or Asia Aviation Plc, rose 11.2%.
CLSA Securities (Thailand) also issued a "sell" recommendation for THAI. "It is a difficult task for Mr Charamporn to turn around the airline in a sustainable manner as you have to either increase revenue or cut staff. But THAI continues to lose market share and has to pay staff salaries for 3.5 years just to get rid of them," said CLSA Thailand head, Prinn Panitchpakdi.
Also in Thailand, Bangkok Airways chief, Puttipong Prasarttong-Osoth, said the carrier was looking at expanding its footprint in China, Vietnam and Myanmar through alliances with local carriers.
Puttipong did not say which airlines he was talking to in China or Myanmar (though rumours suggest it is China Eastern Airlines for the Mainland), but he revealed he was in discussions with Vietnam Airlines, with the resort city of Danang the carrier’s prime target in Vietnam. A Bangkok Airways insider has told the Bangkok Post that Phu Quoc, an island off the coast near the Cambodian border, was on the airline's radar too.
Regarding Myanmar, Prote Setsuwan, the carrier’s vice-president for marketing, has said the airline was looking at the potential of serving Myeik and Dawei, although no launch dates had been specified.
From December 1, Bangkok Airways will increase frequencies on Koh Samui-Phuket (from 35 to 45 flights a week), Koh Samui-Singapore (from ten to twelve), Chiang Mai-Yangon (from four to seven) and Chiang Mai-Mandalay (from three to four).
In separate news, Nakhon Ratchasima Airport may soon be revived, as budget carrier Thai Lion Air (TLA) is keen to offer regular flights from the airfield in Korat province in northern Thailand. TLA, the Thai offshoot of Indonesia's Lion Group, is in talks with authorities about linking Nakhon Ratchasima with Bangkok, Chiang Mai, Hat Yai and Phuket, Prawat Duangkanya, director of the state-run airfield, has told the Bangkok Post.
