THAI plans swift upgrade of fleet to reverse losses

By THE NATION

 

 

National carrier told to quickly finalise new business plan ahead of election.
 

THAI AIRWAYS International must revamp its business strategy and quickly finalise a multibillion-baht plan to buy new jetliners in order to tackle chronic losses, says deputy premier Somkid Jatusripitak.

 

THAI, which reported a net loss of Bt3.08 billion in the second quarter of this year due to higher fuel costs and increased competition, has been given three months to review its Bt100-billion fleet expansion plan for 23 new jetliners.

 

Speaking at a seminar on collaboration between state-owned enterprises, Somkid said THAI, the Tourism Authority of Thailand (TAT), Airports of Thailand and state-owned Krung Thai Bank should work together to harness their strengths and capitalise on the country’s tourism industry, which welcomes more than 30 million foreign visitors annually.

 

The heads of four state enterprises, who were speakers yesterday at a panel discussion on “Creating Strength from Partnership for Thailand’s Sustainable Growth”: From left – Yuthasak Supasorn, governor, Tourism Authority of Thailand; Nitinai Sirismatthakarn, president, Airports of Thailand; Sumeth Damrongchaitham, Thai Airways president, and Payong Srivanich, Krungthai Bank president. 

 

In addition, aviation and related industries should also be further developed by capitalising on the large tourism industry and huge number of foreign tourists.

 

Somkid says THAI needs a new business strategy that can turn around its business amid increased competition in the airline industry and that would require buying new planes to increase customer satisfaction. 

 

The airline also needs to tackle its high operating costs, a key factor in its chronic losses, as are high fuel costs.

 

Somkid said the government was preparing to enter election mode hence THAI executives needed to work out their new business strategy and final aircraft acquisition plan within the next three months.

 

Afterwards, THAI and other state-owned enterprises could also work together to implement the government’s policy on promoting second-tier tourist destinations in cooperation with the Commerce Ministry, which is devising plans to help local communities benefit more from the tourism sector.

 

THAI chairman Ekniti Nitithanprapas said the national flag carrier was devising a business plan to attract more tourists to second-tier destinations in Thailand after the success of its campaign to increase traffic to first-tier locations such as Bangkok, Phuket, Hat Yai and Chiang Mai. The TAT would be responsible for advertising and promotion campaigns to attract |international visitors to new destinations, he said. 

 

THAI also aimed to work more closely with Airports of Thailand, which manages Suvarnabhumi and other airports, to leverage their strengths and turn Thailand into a regional aviation hub.

 

Thirdly, said Ekniti, THAI would focus on a new payment gateway and digital strategy as it upgraded the airline into an international premium brand. 

 

The aircraft acquisition plan, which initially calls for the purchase of 23 new jetliners, will be reviewed to fit the airline’s new strategy and routing, he said, adding that the existing older aircraft were not competitive and resulted in high maintenance costs and unprofitability.

 

Sumeth Damrongchaitham, the airline’s recently-appointed president, said it would take about 24 months for new jetliners to be delivered if the airline placed its order today, so senior executives were already revamping the airline’s business strategy in preparation for the new fleet.

 

According to Sumeth, the airline will also focus on its digital marketing strategy to boost profitability so that accumulated losses can be wiped off within the next four years.

 

Besides digital technology, he said the airline would aggressively pursue profits, reformulate its business portfolio, boost customer experience and implement a more effective human capital management programme.

 

Source: http://www.nationmultimedia.com/detail/business/30354905

 

-- © Copyright The Nation 2018-09-21

Why not increase the prices to make more money?

Well they can't cut on the foodportions anymore so maybe the seats will get smaller this time?

Edited September 20, 20187 yr by Thian

THAI aims to become national premium airline by 2022

 

BANGKOK, 21 September 2018 (NNT) - Thai Airways International Public Company Limited (THAI) has announced its plan to become a national premium airline by 2022. 

The Deputy Prime Minister, Dr. Somkid Jatusripitak, the Transport Minister, Arkhom Termphitthayaphaisit, and the Finance Minister, Apisak Tantivorawong, attended a seminar on "Uniting the Power of Alliance for Sustainable Development of Thailand" on Thursday (Sept 20). Executives from four state enterprises also joined the seminar. 

The Chairman of the Board of Directors of THAI, Dr. Ekniti Nitithanprapas, said the event was held to explain the guideline for implementing aviation restoration and strategic planning, after it was approved by the State Enterprise Policy Committee last week. 

Dr. Ekniti said the national flag carrier also plans to rank in the world's top five airliners by 2022.

 

-- nnt 2018-09-21

How many of these have there been in the last 5 years alone? 

Their operation from top to bottom is a disaster, in tough economic times airlines need to focus on getting <deleted> on seats and ensuring that operational.staff levels tie in with the company's workload more effectively.

They need to trim the fat big time, how many former air force generals on the books on a nice retainer I wonder.

 

Price wise THAI are a joke on many routes. They're simply not competitive with either other flagship carriers or the middle eastern ones who are doing so so well right now.

 

Surely leasing planes is a better move also. The costs associated with owning are insane

They really are a bunch of clowns. They are still one of the most expensive airlines listed for a very second rate service.

 

They were as usual the most expensive to LHR when I booked recently and when we booked Japan for xmas they were more than ANA and Japan Airlines. 

Never flown Thai because it’s always too expensive compaired to middle eastern airlines so I guess that tells you something. They need to be competitive otherwise buying a new fleet is not going to make any difference to their current situation.

BA uses ancient 18 year old 777's LHR-BKK and are always full and making money. Buying new planes is not the answer.... reduce your prices to compete.

Sent from my SAMSUNG-SM-G890A using Thailand Forum - Thaivisa mobile app

Amazing how they all use the higher fuel price B. S. when fuel prices are lower than a few years ago and fuel surcharges were never lowered when fuel prices dropped

Now reading between the lines the partial quote " THAI AIRWAYS International must revamp its business strategy and quickly finalise a multibillion-baht plan to buy new jetliners in order to tackle chronic losses, says deputy premier Somkid Jatusripitak."  should be taken to read perhaps as;-

 

We need to order as many new planes as possible prior to us getting kicked out of office at the next election, as there is a massive amount of money "to be gained" from a multi-billion baht plane order.

State owned says it all.

Too many aircraft types (6 types, with only 83 aircraft in total) too many staff, too little service and too many free seats for 'VIPs' results in a loss-making airline.

Edited September 21, 20187 yr by Wiggy

Yes, a business plan for 100 billion bahts-worth of planes wouldn't be a bad idea. Problem is, the new guy wouldn't know where to start. He'd be more likely to draw a plan of the route he takes between his chair, the noodle bar and the john. It's not the fleet that needs upgrading, it's the playboy twerps who've been empowered to fill their loss-making fuel tanks. As for Sumeth, the new boss: ask him for a SWOT analysis and he'd probably reach for his mosquito zapper. And now they're saying they don't need all those 23 new planes, right now, but that some may come in handy in the future. THAI has now become a bad joke and the sooner Somkid and the rest of his kind realise this and put the airline up for sale, the better. Now, if, let's say, Air New Zealand were running the show, I wonder how things would change. Or any of the top 20 long-haul airlines, for that matter . . . since Somkid will be as good as giving THAI away, by election time.

3 hours ago, ukrules said:

Why not increase the prices to make more money?

Oh they will for sure.

3 hours ago, ukrules said:

Why not increase the prices to make more money?

That's the Thai way.

 

Thai should have been instinct together with the last of the dinosaurs but yet it's still here alive and kicking and bleeding money, with very strong union, dozen type of aircraft equipments, older and heavier less enthusiastic cabin crew, silly pricing and the darling baby of the freebees loving high ranking government officials, i don't see anything significantly positive happening to Thai... 

I agree with you ezzra, also if they (management) would stop trying to be an airline that they are NOT, and lower their prices to a competitive level, maybe (just maybe) the flying public, tourists and locals alike will consider flying this airline.  In the meantime, enjoy flying near empty aircraft. 

2 hours ago, z42 said:

How many of these have there been in the last 5 years alone? 

Their operation from top to bottom is a disaster, in tough economic times airlines need to focus on getting <deleted> on seats and ensuring that operational.staff levels tie in with the company's workload more effectively.

They need to trim the fat big time, how many former air force generals on the books on a nice retainer I wonder.

 

Price wise THAI are a joke on many routes. They're simply not competitive with either other flagship carriers or the middle eastern ones who are doing so so well right now.

 

Surely leasing planes is a better move also. The costs associated with owning are insane

Yes feather bedding of every kind is apprently prevalent. It's really just another firm of corruption. Every hi-so thinks Thai should fly them everywhere for free and it all depends on who your have to pull stings with, like every thing else in Thailand. Thai needs to take a knife to all the freebies allowed to so-called important people, including board members that dont attend meetings or favoured person contracts that don't perform. Let's hope they don't fiorm a committee of needy hi-sos and retired generals to advise.

11 minutes ago, pattayadon said:

I agree with you ezzra, also if they (management) would stop trying to be an airline that they are NOT, and lower their prices to a competitive level, maybe (just maybe) the flying public, tourists and locals alike will consider flying this airline.  In the meantime, enjoy flying near empty aircraft. 

On certain routes that I fly they are always full planes and sometimes I cannot get a seat for weeks if I don't book months ahead.

I used Thai air for years then all of a sudden the prices were hiked up over 30% so lost me as a loyal customer to Eva air,Malaysia air.they done the old Thai business trick.if no customer put prices up and now they are paying the price.new planes aint the answer.most people don't book flights because of what plane they are flying,most book for value and service.

3 hours ago, webfact said:

THAI aims to become national premium airline by 2022

 

Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha

Its run for State employees and someone needs to pay if its not them.  I wont be making any contributions. 

It needs to be run as a business and not as a plaything for the Government. This means bringing in experienced executives in the airline business but where do you find those in Thailand? The current board is filled with political appointees and senior Air Force personnel, though there are a couple of prominent Thai businessmen, and the executives are, with one exception, people who have been in the company for years. Companies need new blood to keep fresh and it doesn't happen at THAI. 

 

Sadly, for THAI, a foreign board member or senior executive is almost certainly out of the question. 

 

 

Well for a start they need people in top positions that actually

know how to run an airline,and profitably, not political appointees,

then they need to buy planes that are most suited for the job,not

the ones that offer the highest commissions,they have too many

different types of planes in the fleet, meaning,they need to carry

spares for them all,instead of just one or two types of plane,too

many freebies for MP's,friends of the airline,really they need a

foreign CEO,who is given a free hand to cut out the rot,but that

will never happen.

regards worgeordie

3 hours ago, webfact said:

plans to rank in the world's top five airliners by 2022.

Oh . . . hold me up, somebody. Surely Ekniti could be sued for issuing fake news, here.

How's this for a business plan; no more freebies for Board members and hangers-on; check and match their competitors prices.  Job done.

A fleet upgrade is but one factor in a recovery. I've half a work lifetime in airlines and once flew Thai quite regularly. My top of the head recovery list would include:

• Fleet upgrade and rationalization (newer aircraft, less types)
• Half the board, the CEO and at least half the top execs to be experienced and foreign airline execs
• Reduced government ownership and removal of government participation in decision making
• Cut prices now (to chase volume)
• Drastic reduction in free VVIP/VIP tickets
• 25% staff numbers reduction
• Refresh on-board product and lounges (hard and soft elements)
• Retrain customer facing staff in providing genuine customer service
• Sell loss making subsidiaries

Or just sell it to Singapore Airlines.

The cash cow are the premium seat, (biz class etc), every man and his soi dog who hold any rank in the Gov or Military get passes and these are confirmed, not standby filling extra seats on THAI and the fill up the premium seats with these with no revenue.  There was an article a few years ago where on some routes, some 80% of Biz seats on THAI were FOC.

 

We recently bought a ticket from Oz to BKK, $702 on Qantas/EK (Full service with 30kg) or $1280 on TG. 

1 hour ago, falang1969 said:

BA uses ancient 18 year old 777's LHR-BKK and are always full and making money. Buying new planes is not the answer.... reduce your prices to compete.

Whilst I agree that they are overpriced, I've flown Business Class on other decent airlines for less than Thai economy a number of times, but, if as you say, their old 777's on the BKK - LHR route are always full and making money, why would they feel the need to reduce prices, they clearly don't need to compete?

 

I flew on that route last Christmas, economy on the A380 using points, whilst the seat itself was fine, plenty of legroom in a bulkhead seat upstairs, the service was abysmal and the food on the way back was the worst meal I've ever had on an aircraft.

One BILLION Baht a month losses in last quarter !!!!!! Wow, if that was anywhere else the entire board would have been wiped away, and replaced with intelligent managers / directors by now...