Specialists urge privatisation, board revamp at THAI Airways

[webfact]

THAI
Specialists urge privatisation, board revamp at THAI Airways
Bamrung Amnatcharoenrit
The Nation

BANGKOK: -- Thai Airways International Plc, the national carrier, should be privatised and also look for ways to get qualified members on its board of directors if the airline wants to stay competitive in the aviation industry, according to specialists from finance, academics and the Thailand Development Research Institute (TDRI).

They agreed that the 54-year-old airline has faced significant trouble in internal management and financial performance of late. Citing rampant political interference, the carrier has been losing its competitiveness in the market and operational reform has become a must, they said.

Banyong Pongpanich, chairman of Phatra Securities Plc and previously a member of the board of directors of THAI, said the airline should be privatised immediately to keep it alive and thriving in the industry.

Using ailing Qantas Airways as an example, he said the Australian carrier allowed investors to hold more stakes in the company in order to reduce its status as a state enterprise, and also as a source for new funding.

Based on his idea, a 51 per cent stake held by the finance ministry in THAI should be replaced by Thai investors.

No longer would the airline be state enterprise, thereby not allowing politicians to cash in on the operation, making it similar to British Airways.

Being a state enterprise also poses trouble within the operation, he said. Clearly, the board members who sit in THAI are from state agencies. Despite the quota of competent members on the board, it is being exploited by politicians who choose their own people to sit in.

In addition, the operation has followed the regulations of a state enterprise, which has produced barriers in operation with time-consuming processes in decision-making on urgent issues. More seriously, it is a loophole to let politicians in to interfere with the management team.

Duenden Nikomborirak, TDRI's research director, said there was nothing bad about being a state enterprise. Looking at Singapore, more than half of the companies exist as state enterprises in the island nation, she said.

However, they are successful in running their businesses, and, one can count Singapore Airlines among those firms.

According to Nikomborirak, there are no state servants sitting on the company's board. Instead, it is run by professionals from different fields such as finance, law, marketing, trading and transportation.

She said this reflected that there was no clear system in selecting qualified board members at THAI.

The current procedure has proved itself no longer workable, she added, as it can allow politicians to cash in and allow the finance minister to take charge for approval.

''The person who manages [THAI] profitably cannot stay, but the person [who] failed the company can stay,'' she said, adding that transparency in the operation could also be improved.

She urged that it should have a viable checking system to keep balance in the operation.

They specialists spoke yesterday at a seminar on "Breaking Thai Airways International Crisis for Development and Sustainability,'' held by Thai Airways International Union.


-- The Nation 2014-04-18

[NongKhaiKid]

Sensible and oft repeated ideas with little chance of success, too many jobs for the boys at stake.

In addition all the freebie tickets etc. might be disappear.

[ChrisY1]

A fine example of what nepotism (and corruption) can do for a major state enterprise......with debts of almost 250 bill.....the writing's on the wall!

The government cannot keep throwing good money after bad as in the rice scheme......eventually the money supply ends and the wheels, or in Thai Airways case, the wings, fall off.

[JoeThePoster]

Based on his idea, a 51 per cent stake held by the finance ministry in THAI should be replaced by Thai investors.

Yup, give it directly to the string pullers so they can lose their own money for a change.

[Thait Spot]

Isn't Priewpan Damapong now on the board since leaving his role as head of police?

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

[Ricardo]

Based on his idea, a 51 per cent stake held by the finance ministry in THAI should be replaced by Thai investors.

But will they step-forward, to buy those shares, I mean would you ?

[BillyBobThai]

Best thing to do is to let fail, then maybe, someone will pick it up at a fire sale.

[Sydebolle]

Give it to the public hand and it gets screwed up here - like everything else, everywhere, all the time - guaranteed!

[Tatsujin]

Best thing to do is to let fail, then maybe, someone will pick it up at a fire sale.

Wasn't it Jatuporn who was going to buy an airline . . . ?

[focus27]

The 'Fundamental Supporters' of these so-called 'specialists', the Thailand Development Research Institute (TDRI), include the Canadian CIDA and American USAID, both well-known champions of privatising the whole world for the benefit of their corporate friends.

http://tdri.or.th/en/about/mission-en/

This report is perfectly aligned with such private non-Thai interests.

Edited April 18, 2014 by focus27

[noodle]

Maybe Yingluck could sell it to Singapore:)

[belg]

"qualified members on its board of directors "

yes nepotism is alive & well

no need for competent people, only people with good connections can get the job without the qualifications

[Thai at Heart]

Who the hell tries to compare running businesses in Singapore and Thailand, Mr.Nikomborirak?

Research Director? Hahaha. My god.

OK. Starter for 10. List 3 major differences between Singapore and Thailand. And, the answer is not that they have a casino!

Ummmmmm

1. They have very low corruption

2. They have qualified people

3. They don't let ex retired air force guys run the national airline....

Edited April 18, 2014 by Thai at Heart

[geriatrickid]

The 'Fundamental Supporters' of these so-called 'specialists', the Thailand Development Research Institute (TDRI), include the Canadian CIDA and American USAID, both well-known champions of privatising the whole world for the benefit of their corporate friends.

http://tdri.or.th/en/about/mission-en/

This report is perfectly aligned with such private non-Thai interests.

False allegation. CIDA is a reputable organization and beyond reproach in regard to its ethics. USAID i s also beyond reproach in this matter.

The fact is, that Thai Airways is where the Thai military sends its personnel and is for all intents and purposes a business entity controlled by the military and not the government. The Thai taxpayer subsidizes while the Thai military benefits.

TG must be privatized and allowed a free hand to clean house starting with the removal of unqualified military personnel, a removal of the trade unions who have blocked any and all progressive changes, and a review of all supply and service contracts. I think that if the contracts were reviewed and the large fees TG pays to the Thai military for access to facilities, and the other questionable contracts in respect to fuel and supplies immediate savings could be realized. Change the board of directors and bring in some new faces for management, preferably foreigners who have worked in Asia and the Gulf. Under no circumstances hire foreigners from the legacy carriers of the USA, Canada, Australia or Canada.

[geriatrickid]

Maybe Yingluck could sell it to Singapore:)

They are already burdened with troubled Singapore Airlines.

[Ulic]

The politicians will not give up there airline perks until the company is bankrupt. So no changes in the short term.

[webfact]

Top Official: Thai Airways Must Be Privatised
By Khaosod English



BANGKOK: -- A former Thai Airways executive told a public forum today that privatising Thai Airways is the only way to save the debt-ridden national airline from imminent financial collapse.

Thai Airways is burdened with a 250 billion baht debt and its current operating funds stand at only 56 billion baht, said Mr. Banyong Pongpanit, a former executive board member of the airline who spoke at the public forum held by Thai Airways executives today.

"The solution is to privatise Thai Airways in a suud soi [all the way into the alley] manner," Mr. Banyong told the audience, using a Thai idiom. "Otherwise the company will face a massive financial crisis in the next 6 months."

Mr. Banyong said that the state-owned Thai Airways can no longer compete with the private airline industry. Although the state assists the airline by mandating that all state agencies fly with Thai Airways on official trips, the assistance only amounts to 3% of the airline's revenue, Mr, Banyong said.

Mr. Banyong also claimed that the structure of Thai Airways is plagued with favouritism, with officials appointing their favourite civil servants into important positions without any test of professional competence.

Ms. Deunden Nikomborirak, a research director of Thailand Development Research Institute (TDRI), echoed Mr. Banyong's concern, stating that political factors have influenced the appointments of many top jobs.

"It is not wrong for Thai Airways to be a state enterprise, but the heart of the issue is the management and administration," Ms. Deunden said. "Today we must let the private sector, which is equipped with more knowledge and ability, manage the airline, like Singapore Airlines, which has seen much success."

She added that Thai Airways also desperately needs a transparent, accountable management system that is open to public scrutiny and free from political interference.

ACM Prachin Chantong, chief of the Royal Thai Air Force and chairman of Thai Airways' board of executives, said he welcomes all opinions in order to solve the airline's financial issues.

He remains optimistic, and expressed hope that over the next year and a half Thai Airways will undergo reforms that allow it to achieve the status of "ASEAN's number 1 airline."

Source: http://en.khaosod.co.th/detail.php?newsid=1397808830


-- Khaosod English 2014-04-18

[terryp]

this was being set up months ago by thaksin plus his Wall St buddies via the CFR and his legal team................... just like He did with thai Oil...............The Thais are in need of vasaline as this is going to be one of many

So many just dont get it , of course its loosing money its a National asset and is being run to LOOSE money...wait until its priivatised it will make huge profits ...its all part of the game to make it look worthless...why do you think there is Nok Air and Thai Smile (they will be sold as separate concerns also....that means even more profit for the investors )...its all been planned this way

Edited April 18, 2014 by terryp

[Ricardo]

"He remains optimistic, and expressed hope that over the next year and a half Thai Airways will undergo reforms that allow it to achieve the status of "ASEAN's number 1 airline."

... excluding Singapore Airlines & Cathay Pacific, of course ...

because they're owned/operated by foreigners, which is cheating.

[Frank James]

Call Tony Fernandez immediately. He'll sort it out for you. Or Richard Branson. Sorry, SIR Richard!

Whatever you do, don't call that Ryan dick.

[bigbamboo]

Call Tony Fernandez immediately. He'll sort it out for you. Or Richard Branson. Sorry, SIR Richard!

Whatever you do, don't call that Ryan dick.

Or the rice scam man.

The suggestion is a good one. They might be able to get away with amateurs in government but THAI is up against top class international competition and if this lame duck is to get off the ground again it needs capable professionals to run it.

[geriatrickid]

this was being set up months ago by thaksin plus his Wall St buddies via the CFR and his legal team................... just like He did with thai Oil...............The Thais are in need of vasaline as this is going to be one of many

So many just dont get it , of course its loosing money its a National asset and is being run to LOOSE money...wait until its priivatised it will make huge profits ...its all part of the game to make it look worthless...why do you think there is Nok Air and Thai Smile (they will be sold as separate concerns also....that means even more profit for the investors )...its all been planned this way

Rubbish. Thai Smile was created in the image of Air Canada's Rouge and Singapore Airline's Scoot. SQ, TG and AC are *A carriers and all are following the same roadmap.

Only a nutter would try and link this to Thaksin. The fiscal conservatives in The Democrat party were supporters of privatization long ago, and it was one of their better policies. It was the PTP that had initially resisted. The PTP is not longer resisting now that it has experienced the blackmail of the TG trade unions. TG has to pay large fees to the Thai Air Force to access several airports. That in itself should give you a clue as to what the underlying issue is.

Even if privatized, IMO the debt burden will eventually put TG into bankruptcy

[geriatrickid]

Call Tony Fernandez immediately. He'll sort it out for you. Or Richard Branson. Sorry, SIR Richard!

Whatever you do, don't call that Ryan dick.

Air Asia doesn't do significant long haul traffic between major airports. FD specializes in short haul which is very different than long haul.

Branson's Virgin has been lambasted over the past 2 years and is facing some of its own viability issues.

Edited April 18, 2014 by geriatrickid

[Frank James]

Air Asia could keep doing what it does so well, while the newly rebuilt Thai could maintain its upper end service and routing with new features and more efficiency under well proven new management. A dream, of course. One thing is obvious: the way it is now, cannot go on.

[ginjag]

Air Asia could keep doing what it does so well, while the newly rebuilt Thai could maintain its upper end service and routing with new features and more efficiency under well proven new management. A dream, of course. One thing is obvious: the way it is now, cannot go on.

Air Asia are nicely-slowly doing things right, Doing their sums waiting for the right time to strike into mega long haul flights, Thai will be blown away.

We are all awaiting with baited breath for Air Asia to secure London from DMK. thus linking their domestic with international. I will definitely use them if they started the Europe flight DIRECT.

All this debt And Thai are leasing, and obtaining A380s as though they were 2 a penny, but the problem is they are not filling them with Fare paying passengers.

[Ricardo]

I'm not sure whether the LCC business-model will ever be all-that-successful, or compete with legacy-airlines like Thai, on longer non-stop routes, but that's where the new Gulf-based airlines do manage to offer a much-wider range of destinations & better service at lower-cost, thanks to the convenient-locations of their various hubs.

Meanwhile Thai now only aspires to be good by ASEAN standards, not against their true competition, which is world-wide.