Cash-strapped Thai Airways Maps Strategic Plan For Profit

[george]

Cash-strapped THAI Airways maps strategic plan for profit

BANGKOK: -- Loss-making national flag carrier Thai Airways International (THAI) announced a two-stage strategic plan aimed at enabling the airline to turn around to profit amid the global economic meltdown, according to Pichai Chunhavajira, chair of the committee managing THAI’s business and financial rehabilitation plan.

THAI announced in February that it lost Bt21.3 billion (US$592 million) in 2008, the company's first annual loss in 43 years, because of high fuel prices, foreign exchange losses due to the weakened baht, and protests that temporarily shut down Bangkok's two airports from November 25 to December 3 last year.

On Thursday Mr. Pichai told a press conference that under the terms of the urgent rehabilitation plan to be implemented now until next year, THAI will boost its revenues through improved sales and more efficient management of its revenue.

The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.

Other measures under the plan include lowering management overhead by 10 per cent from Bt100 billion in 2009 and cutting fees of board meetings by 25 per cent.

Because of the decision to cut expenses, THAI salaries will not be raised and no bonuses will be given, overtime work will be reduced and buying six Airbus A330-300s this year and two more in 2010 will be postponed.

THAI is facing a cash flow problem amounting to Bt35 billion and postponing Bt15 billion in payments will require the airline to borrow only Bt20 billion to boost its liquidity.

The airline believes that with the first rehabilitation plan the company’s performance could turn around with earnings before interest, tax, depreciation and amortisation (EBITDA) of Bt33 billion, profit after taxes of Bt6-7 billion and debts to equity ratio at 1:1.5 or 1:1 from 3:1 currently.

Under the second strategic plan, new aircraft to be acquired will be reduced to 4 or 5 from 10 now, corporate and personnel development, and restructuring the financial system.

-- TNA 2009-04-03

[goonerthegooner]

Cash-strapped THAI Airways maps strategic plan for profit

BANGKOK: -- Loss-making national flag carrier Thai Airways International (THAI) announced a two-stage strategic plan aimed at enabling the airline to turn around to profit amid the global economic meltdown, according to Pichai Chunhavajira, chair of the committee managing THAI's business and financial rehabilitation plan.

THAI announced in February that it lost Bt21.3 billion (US$592 million) in 2008, the company's first annual loss in 43 years, because of high fuel prices, foreign exchange losses due to the weakened baht, and protests that temporarily shut down Bangkok's two airports from November 25 to December 3 last year.

On Thursday Mr. Pichai told a press conference that under the terms of the urgent rehabilitation plan to be implemented now until next year, THAI will boost its revenues through improved sales and more efficient management of its revenue.

The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.

Other measures under the plan include lowering management overhead by 10 per cent from Bt100 billion in 2009 and cutting fees of board meetings by 25 per cent.

Because of the decision to cut expenses, THAI salaries will not be raised and no bonuses will be given, overtime work will be reduced and buying six Airbus A330-300s this year and two more in 2010 will be postponed.

THAI is facing a cash flow problem amounting to Bt35 billion and postponing Bt15 billion in payments will require the airline to borrow only Bt20 billion to boost its liquidity.

The airline believes that with the first rehabilitation plan the company's performance could turn around with earnings before interest, tax, depreciation and amortisation (EBITDA) of Bt33 billion, profit after taxes of Bt6-7 billion and debts to equity ratio at 1:1.5 or 1:1 from 3:1 currently.

Under the second strategic plan, new aircraft to be acquired will be reduced to 4 or 5 from 10 now, corporate and personnel development, and restructuring the financial system.

Now there is a good way to claw back the losses, Raise the ticket price

The Thai Airways Management are priceless?????,

[bdenner]

Cash-strapped THAI Airways maps strategic plan for profit

................ foreign exchange losses due to the weakened baht, ...................

-- TNA 2009-04-03

<deleted> - The Baht has maintained status quo with the USD and STRENGTHENED against most western currencies by some 25% over the period mentioned.

Do these people really know what is going on other than gross miss management!

[think_too_mut]

Now there is a good way to claw back the losses, Raise the ticket price

The Thai Airways Management are priceless?????,

Very funny, indeed.

But nobody has come up with an idea to bring experienced and seasoned farang managers from United, Delta, North West, Us Airways....to totally run TG aground. Those morons feel in bankrupcy like fish in the water.

Those apparent perverts could also teach TG a few tricks about employing recycled grandmas as cabin crew.

[bkkjames]

Now there is a good way to claw back the losses, Raise the ticket price

The Thai Airways Management are priceless?????,

Very funny, indeed.

But nobody has come up with an idea to bring experienced and seasoned farang managers from United, Delta, North West, Us Airways....to totally run TG aground. Those morons feel in bankrupcy like fish in the water.

Those apparent perverts could also teach TG a few tricks about employing recycled grandmas as cabin crew.

What about bringing in someone from LH?

[think_too_mut]

Now there is a good way to claw back the losses, Raise the ticket price

The Thai Airways Management are priceless?????,

Very funny, indeed.

But nobody has come up with an idea to bring experienced and seasoned farang managers from United, Delta, North West, Us Airways....to totally run TG aground. Those morons feel in bankrupcy like fish in the water.

Those apparent perverts could also teach TG a few tricks about employing recycled grandmas as cabin crew.

What about bringing in someone from LH?

For what? For grannies?

On topic, I posted a scene from CentrAir airport in Nagoya from last Sunday from the flight that brought my family back to Japan.

Cost cutting also means passengers have to climb stairs and board a bus. Poor those who shelled for Biz class.

[bkkjames]

to run an airline? I don't care if they have grannies or not, I am more concerned with safety, efficiency, price competitiveness, inflight service and ammenities, on-time schedule.

wasn't it LH that was going to buy into TG a few years ago to do these things?

[think_too_mut]

to run an airline? I don't care if they have grannies or not

Ok, ok, not exactly grannies , rather <deleted>.

LH crew waiting on their shift at Suvarnabhumi:

[bkkjames]

to run an airline? I don't care if they have grannies or not

Ok, ok, not exactly grannies , rather <deleted>.

LH crew waiting on their shift at Suvarnabhumi:

sorry, I don't have a picture of TG crew selling blankets and other items at JJ market

[Carmine6]

Cash-strapped THAI Airways maps strategic plan for profit

The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.

Now there is a good way to claw back the losses, Raise the ticket price

The Thai Airways Management are priceless?????,

That's not saying price increase, it's saying they want to increase the amount of tickets booked online to 5 to 8 percent of the total sales.

I'd guess this would reduce fees to the travel agents. Also would save tons of administrative backend since customers are dealing with and paying directly to the airline. Also cuts down on the amount of people taking reservations or inquiries over the phone.

The US carriers caught onto this years ago. It's actually way more annoying dealing with them on the phone than on the web.

[think_too_mut]

to run an airline? I don't care if they have grannies or not

Ok, ok, not exactly grannies , rather <deleted>.

LH crew waiting on their shift at Suvarnabhumi:

sorry, I don't have a picture of TG crew selling blankets and other items at JJ market

That makes your posts dull.

To lend you a hand, here are 2 pics of TG crew selling cigarettes and drinks. Do they come like that (in uniforms and with corporate security pass and id pictures) to Chatuchak market?

[bkkjames]

to run an airline? I don't care if they have grannies or not

Ok, ok, not exactly grannies , rather <deleted>.

LH crew waiting on their shift at Suvarnabhumi:

sorry, I don't have a picture of TG crew selling blankets and other items at JJ market

That makes your posts dull.

To lend you a hand, here are 2 pics of TG crew selling cigarettes and drinks. Do they come like that (in uniforms and with corporate security pass and id pictures) to Chatuchak market?

don't know, just admiring those monitors on what appears to be a 777.

[PhilHarries]

On Thursday Mr. Pichai told a press conference that under the terms of the urgent rehabilitation plan to be implemented now until next year, THAI will boost its revenues through improved sales and more efficient management of its revenue.

Well I'll be bu66ered!

"We're losing money folks, let's brainstorm some solutions, yes khun Somchai what's your idea?"

"Well Sir, we should sell more tickets."

"<deleted> me khun Somchai, what a brilliant idea, you should be in management, it's lucky we have such talent with us here at THAI!"

The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.

How exactly that is going to improve the sales of tickets beats the sh1t out of me but then I'm only an engineer.

Other measures under the plan include lowering management overhead by 10 per cent from Bt100 billion in 2009 and cutting fees of board meetings by 25 per cent.

Speaks volumes about their management structure when ten percent of their overheads is fifty percent of their losses.

Cut the fees of board meetings by 25%?

They've lost twenty odd BILLION, just what kind of "fees" do they lash out for 25% of them to be more that a drop in the ocean?

Ah, FEES! Why you no say, khaw thoot, khaw chai khrap.

No, all THAI need to do sell all their planes and sack all their staff, except the management of course, and then sell one ticket on e Bay for 150 billion and they should be able to report a profit (a pre FEES profit of course).

[bkkjames]

Thanks for coming to my rescue Phil> I can official retire from this thread. TTM, over to you.

[PhootThaiMaiDai]

The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.

How exactly that is going to improve the sales of tickets beats the sh1t out of me but then I'm only an engineer.

It's a cost cutting measure. While they didn't specifically say they would reduce phone and office staff hours or expense items, that should be inferred. Technology replacing man hours should make sense, even to an engineer.

Cheers

[think_too_mut]

The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.

How exactly that is going to improve the sales of tickets beats the sh1t out of me but then I'm only an engineer.

It's a cost cutting measure. While they didn't specifically say they would reduce phone and office staff hours or expense items, that should be inferred. Technology replacing man hours should make sense, even to an engineer.

Yes, and it just shows how much importance they had given to the web sales - someone cried foul over that in another tread.

From similar functionality - an ATM transaction - cost a bank 12 cents. That same transaction (moving money from 1 account to another) over the phone is 9 dollars. Face to face, in the branch, 23 dollars.

As airline ticket purchase is a considerably longer process, it could cost 40-50$ per ticket sold.

Is it not intuitively clear what doubling (or more) of web based sales would bring in?

Still, at targeted 8% web sales TG are not cutting everyone out, like Virgin Blue in Australia, doing sales over their own web site and nothing else.

[mdechgan]

The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.

I think it just means that they want more people to be buying their tickets through their webiste at the ridiculous quoted prices instead of buying from a travel agency for a more practical price.

cutting fees of board meetings by 25 per cent.

Those must be some very expensive board meetings if they affect the company's balance sheets.

So does the airline take an Airbus and ferry all of its board members to a secluded vacation resort somewhere in the Alps to talk about how to cut expenses?

[think_too_mut]

The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.

I think it just means that they want more people to be buying their tickets through their webiste at the ridiculous quoted prices instead of buying from a travel agency for a more practical price.

Who would buy tickets at high prices? How could they force people to buy at those high prices without extrerminating agencies down to the last one?

Even then, they would have to make Thailand a "must go" destination for leasure travellers who are known to easily switch their travel plans down to outright stay at home and not travel at all.

All airlines maintain those prices, just depends when they release low prices on their web sites.

More likely it is making the tickets available earlier on their web site at the same price as from travel agents. It's a soft-tunable parameter, they just need to make a business decission to request their CIO to implement it.

[mdechgan]

The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.

I think it just means that they want more people to be buying their tickets through their webiste at the ridiculous quoted prices instead of buying from a travel agency for a more practical price.

Who would buy tickets at high prices? How could they force people to buy at those high prices without extrerminating agencies down to the last one?

That is actually a great idea, force all THAI tickets to be bought from the website. Close all sales and ticket offices. I think airasia and some other airlines have done this. Or charge like another $10 USD to actually speak with someone over the phone and meet in person. However they would have to monopolize some flight routes.

[PhilHarries]

The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.

How exactly that is going to improve the sales of tickets beats the sh1t out of me but then I'm only an engineer.

It's a cost cutting measure. While they didn't specifically say they would reduce phone and office staff hours or expense items, that should be inferred. Technology replacing man hours should make sense, even to an engineer.

Cheers

Point taken another great example of corporate cost cutting, sack a rake of the lowest paid staff but maintain the management.

[Zpete]

Years back, Air New Zealand cut all agents commissions.

Agents now charge a fee, so much booking done online now, the airline has prospered, made a profit too.

Thai seems to have cheaper fares thru agents, commissions must be OK.

Why do they not offer decent specials, deals online.

A discount for early payments, that sort of inducement.

At present, well last year I booked, AKL _ BKK _ AKL, 6 months in advance to be sure of my getting what I desired, seat, online checkin etc.

Closer to flying out, the fare dropped 400 bucks.

I was rapt.........NOT.......just suckered, know better this year.

Thai management sure needs a lesson in marketing skills.

Royal Brunei is reaping rewards from Thai ineptitude, planes full most of the time, cheaper too.

I will be back in Oct, flying Thai, better than any other airline on the route, inc Emirates, direct flite too.

Note: If you book thru and agent, MAKE SURE they book usinng Amadeus, otherwise choosing you seat and online checkin will be unavailable if you wish to do those things.

All agents book online, you may do it too.

Cheers, happy flying all.

[think_too_mut]

The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.

How exactly that is going to improve the sales of tickets beats the sh1t out of me but then I'm only an engineer.

It's a cost cutting measure. While they didn't specifically say they would reduce phone and office staff hours or expense items, that should be inferred. Technology replacing man hours should make sense, even to an engineer.

Cheers

Point taken another great example of corporate cost cutting, sack a rake of the lowest paid staff but maintain the management.

What different airlines (or any companies) the world over do?

Let low paid staff sack their management?

Bolsheviks do that.

[wileycoyote]

I think TG would make more sales ,if their Reservation System would open up more than 6 months in advance.

They lose on our advance domestic flights to Air Asia every time,although we would prefer to fly TG ,better inter-lining & safegurads if out intercontinental flight is late.

[think_too_mut]

I think TG would make more sales ,if their Reservation System would open up more than 6 months in advance.

They lose on our advance domestic flights to Air Asia every time,although we would prefer to fly TG ,better inter-lining & safegurads if out intercontinental flight is late.

They might lose on AirAsia kind of customers. What a disaster. Fhat <deleted> they give is their own low cost airline (NokAir).

TG has connecting flights that mickey mouse airlines do not want to have.

Just imagine, if that is something to imagine, once you have landed in Thai, your next flight will have your bags following you.

Or not.

After a 10-12-20 hours flight. Another exercise of your bags out and another check in into a rubbish airline that may charge your baggage weight, just like you just stepped in, as a local, just off the street.

[samui04]

Note: If you book thru and agent, MAKE SURE they book usinng Amadeus, otherwise choosing you seat and online checkin will be unavailable if you wish to do those things.

All agents book online, you may do it too.

Never bought an airline ticket from an agency on the last 10 years.....

The airline web site is always cheaper, if not the airline is managed by idiots....

[Tedhead]

Whatever happened to the much-talked-about-in-January super low fares that were meant to be on their way from Thai Airways? Remember them? International fares for visitors to Thailand were going to be cut by 50%. There was to be 'an announcement soon'.

Perhaps they thought better of it.

[Dwitch]

Whatever happened to the much-talked-about-in-January super low fares that were meant to be on their way from Thai Airways? Remember them? International fares for visitors to Thailand were going to be cut by 50%. There was to be 'an announcement soon'.

Perhaps they thought better of it.

Well they did .......... ....... but only to Asian countries !! eg Hong Kong, India, Philliphines, Malasia, Singapore!! I think I have seen every other airline ( from New Zealand) offer discounts, but as yet nothing from Thai airlines. They surely must be hurting by now , looked up their website for fares under "specials" This is what came up

Waiting !! Under construction !!

Just maybe ?? we will see something soon !!

[PhilHarries]

What different airlines (or any companies) the world over do?

Let low paid staff sack their management?

Bolsheviks do that.

The point I was making, and it's not just THAI and not just airlines, is that corporations increase their management in parallel with staff increases in time of expansion but all too often when the redundancies are handed out managers and administrators are not included. Hence you end up with outfits like THAI that have top heavy management structures. Same with Human Relics.....sorry......Resources, always expand but I've never known a HR manager get "Let Go" as the favourite euphenism for getting the bullet goes.

Like I said in my first reply it comes to something when 10% of a company's management burden accounts for 50% of their losses. There's a message there somewhere but probably too subliminal for THAI management (and too uncomfortable).

[fezman]

Note: If you book thru and agent, MAKE SURE they book usinng Amadeus, otherwise choosing you seat and online checkin will be unavailable if you wish to do those things.

All agents book online, you may do it too.

Never bought an airline ticket from an agency on the last 10 years.....

The airline web site is always cheaper, if not the airline is managed by idiots....

just got a ticket from Sydney to BKK on emarites for $750 au the cheapest on Thai was over $1000 on there website,so the wife and I will save 500 bucks min.

onya Thai ,keep up the good work.