News Backgrounder
Come together to revive THAI pleads its president
September 1st 2019
Thai Airways International (THAI), dealing with deepening losses revealed in its latest quarter, is attempting another recovery plan that includes an appeal to passengers to help solve the airline’s problems. Read More »
“I have been president of THAI for 11 months and there has never been a day without a problem,” said Sumeth Damrongchaitham last month. “Members of the THAI Board of Directors, management and staff recognize THAI as a national carrier and we have all been working hard but the problems we face cannot be easily solved.”
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Outlining a new survival strategy last month he said: “With these aforementioned strategies, we believe THAI will return to its position as one of the top world class airlines, although not as soon as we hoped.
“This depends on the support of Thai passengers who still love THAI. They can help by flying with our airline, using our services and by making recommendations under the #SaveTG concept. All employees and I are confident that we will accomplish our goal.”
It’s a big ask. Last month, the airline reported a second quarter loss of US$223.7 million, more than double the $100.5 million shortfall for the same period a year ago. Revenue plunged by 10%, to $1.4 billion, for the quarter.
THAI attributed its worsening numbers to a slowing global economy, fierce competition, especially from LCC and Gulf rivals, and an eight per cent fall in the Thai baht against the US dollar.
Within days of the results announcement, the THAI board directors of the government-owned airline said the carrier needed to address “external crises such as the strong baht, the U.S.-China trade war, sluggish global economic growth and closure of Pakistani airspace”.
THAI also had to adjust to declining tourist numbers, reduced customer purchasing power and delayed aircraft engine repairs, board directors said.
Major measures to address THAI’s troubled performance are the cost control strategy, SaveTG, where passengers can suggest ideas for savings at the carrier, a zero waste management plan, launching Bangkok-Sendai, its sixth destination in Japan, and investment in digital marketing.
THAI and THAI Smile will work more closely in developing network connectivity, assisted by the regional carrier becoming a Star Alliance connecting partner by year end. THAI is one of the alliance’s longstanding members.
Sumeth also is unhappy about the open skies agreements negotiated by the Thai government, the Bangkok Post reported last month. The THAI boss complained the country’s ministry of transport had agreed to unbalanced open skies with some countries that did not reciprocate in market access.
He said open skies policies combined with LCC growth had forced the airline to withdraw flights from Japan and other markets. LCC rivals, Thai AirAsia. NokScoot and Peach Aviation, have expanded Thailand-Japan flights with fares the flag carrier cannot match.
