THAI recovery plan faces scrutiny by Prayut-led committee

[webfact]

THAI recovery plan faces scrutiny by Prayut-led committee

By THE NATION

 

 

Prime Minister Prayut Chan-o-cha will preside on Wednesday (April 29) over a meeting of the state enterprise policy committee to consider the recovery plans of Thai Airways (THAI) in the wake of the Covid-19 crisis.

 

The national carrier posted a net loss of Bt12 billion last year, its third successive year in the red, and has suspended most flights until the end of May amid the pandemic.

 

Chakkrit Parapuntakul, THAI acting president, will ask Wednesday’s meeting to approve an injection of Bt70 billion to boost the ailing national carrier’s liquidity.

 

Two ways of raising the money will be proposed to the committee: a loan and a bond issuance. The chosen option will need to be guaranteed by the Finance Ministry.

 

Meanwhile, THAI plans to restructure its operations by increasing the role of its regional subsidiary Thai Smile Airways in the financial and airline business, according to the Transport Ministry. The national carrier also aims to establish three subsidiary companies to reduce THAI’s responsibilities and increase opportunities for investment.

 

Nares Puengyam, THAI labour union’s president, said the airline’s executives had not discussed the recovery scheme’s details with the union, especially its effects on staff benefits and other important matters such as the reduction of share proportions or business unit separation.

 

“We have studied the laws related to staff benefits in order to prevent our members losing out if the airline is changed from a state enterprise to another kind of organisation,” he said.

 

Source: https://www.nationthailand.com/news/30386936

 

-- © Copyright The Nation Thailand 2020-04-29

 

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[Creasy]

The all wise. All knowing, omnipotent glorious leader needs to head all the the committees in Thailand.

 

The hub of committees. 

[Chelseafan]

After reading this, one quote comes to mind

 

The definition of insanity is doing the same thing over and over again but expecting different results - Albert Einstein,

 

[Davo369]

Give em all a brucie bonus...

[ezzra]

Sack half of workforce and sell half of the planes will be a wise and good start to recover and Thai will still do well...

[Thailand]

They shoot horses don't they?

[colinneil]

Here we go again, another useless committee, for what?

Thai airways is just a joke, an airline kept afloat with public money, just so the in crowd can use it like a flying taxi service.

[ChrisY1]

"consider the recovery plans" ??

There can be no recovery plans...the airline will never be viable....the only plan to be devised is how to throw more good money after bad, into the bottomless pit of failure, that is Thai. 

[JAG]

3 hours ago, webfact said:

Meanwhile, THAI plans to restructure its operations by increasing the role of its regional subsidiary Thai Smile Airways in the financial and airline business,

So an outfit which lost ThB12 billion last year, and is asking for a ThB70 billion bail out, is proposing to go into the financial business?????????????

[jaiyen]

2 hours ago, ezzra said:

Sack half of workforce and sell half of the planes will be a wise and good start to recover and Thai will still do well...

Why sell the planes and lose more money selling them at a low price ?  Nobody in the world wants to buy a plane right now. Would like to know how many planes are owned outright and how many are leased.

[Denim]

There will always be a state owned Thai Airways.

 

It is the carrier of the privileged elite who despite their wealth like to get free flights.

 

The government will continue to pour tax payers money into this bottomless money pit no matter how much money it loses.

[JAG]

It would be interesting to know how much money Thai will have burned through during this month and next. With no revenue, but still paying to lease aircraft, and one imagines a significant number of staff protected from lay off by various degrees of influence!

[Oziex1]

53 minutes ago, ChrisY1 said:

"consider the recovery plans" ??

There can be no recovery plans...the airline will never be viable....the only plan to be devised is how to throw more good money after bad, into the bottomless pit of failure, that is Thai. 

And how much his head of comittee fee will be.

[yellowboat]

Considering jack boots were stepping on the neck of the golden goose of tourism to begin with.  Now jack boots are going to fix an airline that was hopeless when things were good?  The best thing cha cha could do would bring in one those Irish CEO's that have managed successful airlines in the past, but that is not what xenophobes do.  

 

I have a friend in Hong Kong that seeks out non Chinese people for work.  He does this because Hong Kong is a small place with low variety in certain skills.  cha cha nationalism and xenophobia is not helping the country.   Putting on a pretty uniform is not enough.   Bringing in people from outside Thailand will help everyone.  All of Thailand's military equipment is made elsewhere.  

Edited April 29, 2020 by yellowboat

[new2here]

To me Thai (TG) is very fixable.  But I do think that first there must be some form of commitment by the various stakeholders that TG will be run as a for-profit enterprise.. yes, it is and will most likely remain majority state owned, but that alone dies not mean it can’t also be run profitably — but I think that everyone is going to have to be “all-in” in rehabilitating TG

 

fleet-wise, to me, moving towards a slimmed down and mostly leased fleet I think will serve them well.

 

I just don’t think that CASK/CASM for their current 4-engine A388s and 744s  plus their older B772s are going to financially viable going forward to the next 7-10 years.  Right now, JET-A is relatively low- but that won’t always be the case.. plus more costly maintenance will start becoming more of an issue with their A388s which are closing in on 10yrs, their 744s (20+ yrs) and their B772s (13+ yrs)
 

The B773/A359 is an ideal replacement for their longest haul Euro markets currently served by the A388/B744 will have the best CASK and while keeping decent passenger capacity combined with cargo lift. For mid-range or mid-load markets their B788/9s are ideal..

 

so fleet-wise, TG has some options... 

 

on the revenue side, I’d push their catering arm- they already have a small retail presence (Puff&Pastry) and I think TG can capitalize on Thai food and it’s generally positive view worldwide.

 

maintenance repair and overhaul (MRO) is another HUGE opportunity... most major Asian carriers leverage their MRO abilities— be that like EVAs  EGAT arm, Swires HAECO or even Lufthansa’s JV like Lufthansa Teknik.. TG can compete for MRO work in BKK as it’s centrally located and cost/labour competitive.

 

Next, I’d leverage the heck out of their FFP programme, Royal Orchid Plus.  For many, “miles” can be a very sought after thing and as such, drive their day-to-day spending.  I’d be seriously looking to partner with someone like KBank (BBL partners with AirAsia), SCB or even Krungthai.

many carriers mileage programs are a leading source of revenue - Thai has got to get to that point,

 

Lastly, I’d be looking to leverage their Smile arm (WE) so that they can compete better with the Air Asia’s if the region.. I think there’s big value in a passenger being able to book a single-PNR for places like CNX, UTH, HKT or even KBV through BKK to Europe, Australia or North Asia.. bags go straight through, single-check in, CIQ processing, etc.  I think there’s big value in having WE as a LCC-like subsidiary, that can be interlined to TG.

 

bottom line, TG is very fixable- but I think a hard look/decision has to be first made as to what is Thai going to be.. a state-subsidized carrier (which is fine, some countries operate their flag carriers this way) OR... a state-majority owned but for-profit enterprise.

[JAG]

48 minutes ago, new2here said:

To me Thai (TG) is very fixable.  But I do think that first there must be some form of commitment by the various stakeholders that TG will be run as a for-profit enterprise.. yes, it is and will most likely remain majority state owned, but that alone dies not mean it can’t also be run profitably — but I think that everyone is going to have to be “all-in” in rehabilitating TG

 

fleet-wise, to me, moving towards a slimmed down and mostly leased fleet I think will serve them well.

 

I just don’t think that CASK/CASM for their current 4-engine A388s and 744s  plus their older B772s are going to financially viable going forward to the next 7-10 years.  Right now, JET-A is relatively low- but that won’t always be the case.. plus more costly maintenance will start becoming more of an issue with their A388s which are closing in on 10yrs, their 744s (20+ yrs) and their B772s (13+ yrs)
 

The B773/A359 is an ideal replacement for their longest haul Euro markets currently served by the A388/B744 will have the best CASK and while keeping decent passenger capacity combined with cargo lift. For mid-range or mid-load markets their B788/9s are ideal..

 

so fleet-wise, TG has some options... 

 

on the revenue side, I’d push their catering arm- they already have a small retail presence (Puff&Pastry) and I think TG can capitalize on Thai food and it’s generally positive view worldwide.

 

maintenance repair and overhaul (MRO) is another HUGE opportunity... most major Asian carriers leverage their MRO abilities— be that like EVAs  EGAT arm, Swires HAECO or even Lufthansa’s JV like Lufthansa Teknik.. TG can compete for MRO work in BKK as it’s centrally located and cost/labour competitive.

 

Next, I’d leverage the heck out of their FFP programme, Royal Orchid Plus.  For many, “miles” can be a very sought after thing and as such, drive their day-to-day spending.  I’d be seriously looking to partner with someone like KBank (BBL partners with AirAsia), SCB or even Krungthai.

many carriers mileage programs are a leading source of revenue - Thai has got to get to that point,

 

Lastly, I’d be looking to leverage their Smile arm (WE) so that they can compete better with the Air Asia’s if the region.. I think there’s big value in a passenger being able to book a single-PNR for places like CNX, UTH, HKT or even KBV through BKK to Europe, Australia or North Asia.. bags go straight through, single-check in, CIQ processing, etc.  I think there’s big value in having WE as a LCC-like subsidiary, that can be interlined to TG.

 

bottom line, TG is very fixable- but I think a hard look/decision has to be first made as to what is Thai going to be.. a state-subsidized carrier (which is fine, some countries operate their flag carriers this way) OR... a state-majority owned but for-profit enterprise.

PDTIA

Please don't talk in abbreviations.

I am sure that it is a well thought out, well argued and informative post. Unfortunately, unless one is in the aviation business, it is so packed with T/FLAs (three and four letter abbreviations) as to be incomprehensible!

[realfunster]

52 minutes ago, JAG said:

PDTIA

Please don't talk in abbreviations.

 

 

Good one, I'll remember that for the next time someone AMTD (acronyms me to death).

[Burma Bill]

just "plane" sailing into the abyss!!

[rkidlad]

Sorry, Prayut said just yesterday not to ask him questions about politics (his definition of politics is asking him questions about his incompetence) because he's so busy with the coronavirus situation. If he's so busy with the virus, why on earth would he waste time to head up a team for a matter he has zero knowledge or experience in?

[DaRoadrunner]

It will always lose money as everyone that works there is corrupt and has their snout in the trough. They have all but milked it to death.

[PETERTHEEATER]

8 hours ago, new2here said:

To me Thai (TG) is very fixable.  But I do think that first there must be some form of commitment by the various stakeholders that TG will be run as a for-profit enterprise.. yes, it is and will most likely remain majority state owned, but that alone dies not mean it can’t also be run profitably — but I think that everyone is going to have to be “all-in” in rehabilitating TG

 

fleet-wise, to me, moving towards a slimmed down and mostly leased fleet I think will serve them well.

 

I just don’t think that CASK/CASM for their current 4-engine A388s and 744s  plus their older B772s are going to financially viable going forward to the next 7-10 years.  Right now, JET-A is relatively low- but that won’t always be the case.. plus more costly maintenance will start becoming more of an issue with their A388s which are closing in on 10yrs, their 744s (20+ yrs) and their B772s (13+ yrs)
 

The B773/A359 is an ideal replacement for their longest haul Euro markets currently served by the A388/B744 will have the best CASK and while keeping decent passenger capacity combined with cargo lift. For mid-range or mid-load markets their B788/9s are ideal..

 

so fleet-wise, TG has some options... 

 

on the revenue side, I’d push their catering arm- they already have a small retail presence (Puff&Pastry) and I think TG can capitalize on Thai food and it’s generally positive view worldwide.

 

maintenance repair and overhaul (MRO) is another HUGE opportunity... most major Asian carriers leverage their MRO abilities— be that like EVAs  EGAT arm, Swires HAECO or even Lufthansa’s JV like Lufthansa Teknik.. TG can compete for MRO work in BKK as it’s centrally located and cost/labour competitive.

 

Next, I’d leverage the heck out of their FFP programme, Royal Orchid Plus.  For many, “miles” can be a very sought after thing and as such, drive their day-to-day spending.  I’d be seriously looking to partner with someone like KBank (BBL partners with AirAsia), SCB or even Krungthai.

many carriers mileage programs are a leading source of revenue - Thai has got to get to that point,

 

Lastly, I’d be looking to leverage their Smile arm (WE) so that they can compete better with the Air Asia’s if the region.. I think there’s big value in a passenger being able to book a single-PNR for places like CNX, UTH, HKT or even KBV through BKK to Europe, Australia or North Asia.. bags go straight through, single-check in, CIQ processing, etc.  I think there’s big value in having WE as a LCC-like subsidiary, that can be interlined to TG.

 

bottom line, TG is very fixable- but I think a hard look/decision has to be first made as to what is Thai going to be.. a state-subsidized carrier (which is fine, some countries operate their flag carriers this way) OR... a state-majority owned but for-profit enterprise.

With an outlook like that you would be front runner for the CEO chair. But, I suspect it's a Thai national only position.

[transam]

Weeeeeeeeeeeeell, if you take the wings off a 747, it does resemble a submarine....Just a thought for the "military" panel ........????

[Sydebolle]

Just wonder, what would qualify any of those ministers, deputy prime ministers or even the big wig to do anything else than fill in a passenger form about his thoughts in inflight service.

This subject requires professionalism, unbiased, no nepotism, no corruption and a "carte blanche" to get this dead horse back onto its feet. After a professional study, not done by Thais, the decision would be to close the shop and sell the traffic rights, to privatize the shop and get any governmental influence, interference or capital out of Thai or to just carry on and misuse this de facto state agency as yet another honey pot - or - in other words, a supermarket without a cashier on the way out.

Your call - but none of those excellent excellencies running this country presently has the slightest clue - the writing has been on the wall ever since the politicians blocked Chatichai Bunya-Anantas continuation beyond his 60th birthday. After him everyone was shown the door, Nils Lumholdt, Lennard Holmgren and the epic Captain Yothin. Ever since it was "too many clowns and the circus is not big enough"!