THAI Will be Back in Black This Year, Says Company President

12th Apr 2016

Current Thai International Airways President Charamporn Jotikasthira (the company had five presidents in the last ten years), said the airline is looking to finally post a net profit this year. This would be the first time THAI accomplishes that in the previous five years.

The current strategy, Charamporn said, is to transform the carrier into a blue-chip company and for this, he said, he will need to “take a scalpel” to the state-owned airline.

Mr Charamporn said the carrier should return to black in 2016, as long as the oil prices continue to be at their current low levels and if the price-cutting competition remains relatively calm.

However, he also admitted that the company has grown complacent in recent years, a reason he said, THAI lost its position and a lot of customer trust. For example, Thai Airways came in at 19^th place in the Skytrax World Best Airline rankings for 2015. While being in the top 20 airlines in the world is nothing to be sneered at, for THAI, this was a bad since it occupied a high 5^th place only five years before.

Admitting THAI has been arrogant somewhat, Charamporn said:

I think our watch, our clock, stopped about 10 years ago, so we need a lot to catch up in a lot of areas. We always thought we were the best and we kept telling ourselves we were the best.

Restructuring Program Worked

In the previous financial year, Thai Airways posted a net loss of 13 billion baht, making it the only major airline among Southeast Asian carriers to be in red. However, there is a different side to this loss as a good part of it was due to THAI’s restructuring expenses, such as retirement allowances for those that voluntarily left the company. The company cut 5 per cent of its workforce, or a total of 1,277 employees as a part of an early retirement program.

In addition to cutting its workforce, THAI also cut its fleet from 102 to 95 aircraft and sold its headquarter building.

However, this led to the change in how the stock market views Thai Airways International and its market capitalization rose 61 per cent in the three months since the end of 2015. Furthermore, lower fuel cost could also push THAI back to profitability.

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