Thai Airways International (TG, Bangkok Suvarnabhumi) management has approved a restructuring plan aimed at cutting over THB4billion (USD125.61million) in operational costs at the loss-making carrier over the next six months.
The airline's newly installed chairman, Air Chief Marshall Prajin Juntong, told the Bangkok Post last week that the plan will involve two stages the first of which entails a return to profitability by mid-2015 through the early retirement of hundreds of employees alongside the cutting of overtime claims. The airline directly employs 25'000 staff with an additional 5'000 sourced from subcontractors.
In addition, the carrier will roll out cheaper, more attractive fares to help increase revenue inflows by between USD94-157million.
The second part, due to commence in the third quarter of next year, entails the restructuring of the company's hierarchy involving the hiring of more operational staff, and the improvement of Thai's inflight product.
Concerning operational changes, the plan will see the rationalization of Thai's European route network coupled with the expansion of services to Japan and China. According to the Nation newspaper, Thai is also considering moving some short-haul or domestic services of its subsidiary Thai Smile (Bangkok Suvarnabhumi) from Suvarnabhumi to Bangkok Don Mueang airport.
In a bid to reduce its fuel cost overheads, Thai will maintain the delivery of brand new A330-300s, A350-900s and B787-8s while phasing out its older A330-300s, A340-600s, B777-200(ER)s and B737-400s.
"It should take one to two years, or probably to the first quarter of next year, to see the result of the restructuring. Performance should improve and we aim to be number one in 2017," acting President, Air Chief Marshal Siwakiat Jayema, said.
Months of political turmoil have led to a delay in the implementation of important strategic decisions, resulting in the military junta placing the airline at the top of its list of 56 state-owned enterprises in dire need of restructuring. Losses this year are expected to top THB100billion (USD3.14billion).
