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Thai Airways Advised To Trim Down Costs
6th Nov 2015
Government gave directives for Thai Airways International (THAI) to trim down expenses and draw a workable restructuring plan.
Arkhom Termpittayapaisith, Transport Minister of Thailand said that a cabinet resolution has been issued, directing government firms to implement cost-cutting programmes to raise revenues.
On 27 October, the cabinet gave these firms about a month to present their plans geared towards achieving this goal. THAI, for instance, should come up with a financial restructuring plan, detailing actions to be taken in order to recover from current losses.
Apart from THAI, two more government-run transport firms have been advised to submit recovery programmes.
On top of a restructuring plan, government expects the airline to submit a reorganisational plan.
The transport minister stated that there is an imbalance in the airline's organisational set up, including those on staffing and workload.
The airline is a very big organisation with some top executives having too few workload despite the huge benefits. The minister said this impacts on the airline's total cost.
Earlier attempts at company restructuring, including internal reshuffling of more than 70 executives failed to trim down costs to a desired level. Thus, it is vital for the airline to analyse where it had failed and then come up with a more workable plan.
It was noted however, that huge benefits accorded the airline's top executives and board of trustees aren't the only triggers of its sorry state.
Based on an audit report, the board of trustees received minimal perks from January to June 2015.
Mr. Arkhom said that in the past, board members were given air tickets at no cost but these perks have already been trimmed down. Conference allowances are also quite minimal to have any significant burden on costs.
During one of the airline's plenary sessions held on the second quarter of 2014, it was decided that board members will no longer receive return tickets for international flights every year. What they do receive now are return tickets for domestic flights.
A copy of the minutes of the meeting reveal that monthly salary and conference allowance of each managing executive amount to 50,000 and 30,000 baht, respectively. The same rates apply to each board member. The chairman and deputy chairman however receive bigger amounts of conference allowances by as much as 25% for the chairman.
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