AVIATION
THAI's loss estimated at Bt12bn
The Nation

BANGKOK: -- Thai Airways International Acting President ACM Siwakiat Jayema expects this year's loss would be limited at Bt12 billion, thanks to a rehabilitation plan.

The board of directors will officially approve the establishment of a sub-committee tasked to draw up the rehab plan at the meeting on August 29, he said at a press conference today.

Members of the sub-committee will comprise representatives from the board of directors, executives, and the Superboard.

The rehab plan, which will be implemented in a two-year course to regain the region’s No.1 place, should be complete late September or early October, he said.

Without the rehab plan, losses are expected to hit Bt20 billion this year.

In the short term, the company plans to borrow about Bt5-Bt7 billion from Government Savings Bank to boost liquidity to 15 per cent of revenue. It will also seek a Bt20 billion loan through the Finance Ministry, to further boost liquidity and pay for 5-6 new aircraft.

"There is a room to borrow upto Bt19 billion," the president said.

Through the end of this year, THAI will be delivered seven new aircraft - three Dreamliners, two Airbus A320 and two Boeing 777. On average, five will be delivered each year during 2015-2017.

Today, THAI Executive Vice President Athisak Padchuenjai denied the reports that some 200 pilots have tendered resignation. He said he has not yet received the resignation.

He said that each year, some pilots resign but that is normal and does not damage the company’s operations. Each year, new pilots are also recruited.

Athisak noted that pilots are in high demand in the aviation industry. This may have spurred the reports.

Media reports yesterday said that these pilots resigned en masse on worries of the company’s finances. In the first half of this year, the airline showed over Bt10 billion in net loss. The outlook is not bright given fiercer competition in the industry, led mainly by low-cost airlines.

As of August, THAI employs 1,350 pilots.

Source: http://www.nationmultimedia.com/business/THAIs-loss-estimated-at-Bt12bn-30241699.html


-- The Nation 2014-08-25

Limited at 12 billion. Oh well then, that's a relief. Whew! They'll make that up in no time with good management, won't they?

Edited August 25, 201411 yr by ratcatcher

Considering staff of this company are paid faaaaaaaaaaaaaar less than farang airlines, yet they are expensive, how can they make a loss.

For sure I don't know, so perhaps someone can enlighten me.

Considering staff of this company are paid faaaaaaaaaaaaaar less than farang airlines, yet they are expensive, how can they make a loss.

For sure I don't know, so perhaps someone can enlighten me.

Salary difference is not that great but the biggest problem is overstaffing: far too many hangers-on, achieving little. The response of the union is going to be very interesting to watch: they were inextricably linked with Suthep.

Considering staff of this company are paid faaaaaaaaaaaaaar less than farang airlines, yet they are expensive, how can they make a loss.

For sure I don't know, so perhaps someone can enlighten me.

Salary difference is not that great but the biggest problem is overstaffing: far too many hangers-on, achieving little. The response of the union is going to be very interesting to watch: they were inextricably linked with Suthep.

So bad management......?

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transam, on 25 Aug 2014 - 13:16, said:transam, on 25 Aug 2014 - 13:16, said:

Considering staff of this company are paid faaaaaaaaaaaaaar less than farang airlines, yet they are expensive, how can they make a loss.

For sure I don't know, so perhaps someone can enlighten me.

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transam, on 25 Aug 2014 - 13:30, said:transam, on 25 Aug 2014 - 13:30, said:

Prbkk, on 25 Aug 2014 - 13:26, said:Prbkk, on 25 Aug 2014 - 13:26, said:

transam, on 25 Aug 2014 - 13:16, said:transam, on 25 Aug 2014 - 13:16, said:

Considering staff of this company are paid faaaaaaaaaaaaaar less than farang airlines, yet they are expensive, how can they make a loss.

For sure I don't know, so perhaps someone can enlighten me.

Salary difference is not that great but the biggest problem is overstaffing: far too many hangers-on, achieving little. The response of the union is going to be very interesting to watch: they were inextricably linked with Suthep.

So bad management......?

True, they are paid very close to the same as their Singapore Airlines, Cathay, Western airlines counterparts (because it would be too embarrassing if they happened to meet with their counterparts who knew they were paid less), plus the company pays their personal tax for them.

It's well known they are massively overstaffed and they have way way too many managerial positions which in reality are unnecessary. It's nice to sound important.

There is little to zero focus on performance.

A long stream of poor business decisions is a strong factor.

Edited August 25, 201411 yr by scorecard

Considering staff of this company are paid faaaaaaaaaaaaaar less than farang airlines, yet they are expensive, how can they make a loss.

For sure I don't know, so perhaps someone can enlighten me.

Salary difference is not that great but the biggest problem is overstaffing: far too many hangers-on, achieving little. The response of the union is going to be very interesting to watch: they were inextricably linked with Suthep.

So bad management......?

http://www.eturbonews.com/48247/thai-airways-parallel-malaysia-airlines

They should sort things out the Thai way- just put up the fares!

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transam, on 25 Aug 2014 - 13:16, said:transam, on 25 Aug 2014 - 13:16, said:

Considering staff of this company are paid faaaaaaaaaaaaaar less than farang airlines, yet they are expensive, how can they make a loss.

For sure I don't know, so perhaps someone can enlighten me.

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

transam, on 25 Aug 2014 - 13:30, said:transam, on 25 Aug 2014 - 13:30, said:

Prbkk, on 25 Aug 2014 - 13:26, said:Prbkk, on 25 Aug 2014 - 13:26, said:

transam, on 25 Aug 2014 - 13:16, said:transam, on 25 Aug 2014 - 13:16, said:

Considering staff of this company are paid faaaaaaaaaaaaaar less than farang airlines, yet they are expensive, how can they make a loss.

For sure I don't know, so perhaps someone can enlighten me.

Salary difference is not that great but the biggest problem is overstaffing: far too many hangers-on, achieving little. The response of the union is going to be very interesting to watch: they were inextricably linked with Suthep.

So bad management......?

True, they are paid very close to the same as their Singapore Airlines, Cathay, Western airlines counterparts (because it would be too embarrassing if they happened to meet with their counterparts who knew they were paid less), plus the company pays their personal tax for them.

It's well known they are massively overstaffed and they have way way too many managerial positions which in reality are unnecessary. It's nice to sound important.

There is little to zero focus on performance.

A long stream of poor business decisions is a strong factor.

Happening all over the world. Elaborate job titles signifying nothing. In some countries, environment tech replaces garbage collector...?

Considering staff of this company are paid faaaaaaaaaaaaaar less than farang airlines, yet they are expensive, how can they make a loss.

For sure I don't know, so perhaps someone can enlighten me.

Salary difference is not that great but the biggest problem is overstaffing: far too many hangers-on, achieving little. The response of the union is going to be very interesting to watch: they were inextricably linked with Suthep.

So bad management......?

http://www.eturbonews.com/48247/thai-airways-parallel-malaysia-airlines

A pretty acurate article....cronism and nepotism is so ingrained in Thai, that it's difficult to see anything changing in reality.....there'll be some facelifting.....a bit more makeup smeared on, but to see major strategic changes happening.....just can't see that!

Far to many "freebie" flights for government officials and (more importantly) their families, on "fact-finding" trips to places like London, Paris, Berlin, etc.

That's how they lost money.

All done on business or first class seats without compensation to the airline from the goverment

To compensate for the freebie travel in first class and business they tried to raise fares in economy class to make up for the loses in the "premium" seats with economy class fares higher than anyone else on the same routes.

Bound to lose money that way.

And yes, they need to reduce staff because they have a lot of "hangers on" that don't earn their wages.

Not the least of which is their pilots with "seniority".

Edited August 25, 201411 yr by IMA_FARANG

Amazing how THAI can lose money when tourist arrivals have been increasing double digits in the past 4-5 years until the protest and coup. Agree that THAI airway tickets are expensive if purchase locally but when purchase overseas they are for the majority of times cheaper or same as local airlines in foreign countries. It all comes down to poor management and I suspect shareholders are being overpaid while the company rots. This is pretty common with Thai corporate companies.

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transam, on 25 Aug 2014 - 13:30, said:transam, on 25 Aug 2014 - 13:30, said:

Prbkk, on 25 Aug 2014 - 13:26, said:Prbkk, on 25 Aug 2014 - 13:26, said:

Salary difference is not that great but the biggest problem is overstaffing: far too many hangers-on, achieving little. The response of the union is going to be very interesting to watch: they were inextricably linked with Suthep.

So bad management......?

True, they are paid very close to the same as their Singapore Airlines, Cathay, Western airlines counterparts (because it would be too embarrassing if they happened to meet with their counterparts who knew they were paid less), plus the company pays their personal tax for them.

It's well known they are massively overstaffed and they have way way too many managerial positions which in reality are unnecessary. It's nice to sound important.

There is little to zero focus on performance.

A long stream of poor business decisions is a strong factor.

Happening all over the world. Elaborate job titles signifying nothing. In some countries, environment tech replaces garbage collector...?

I think the point being made was about over staffing not their job titles.

Thai in rehab? What was their substance of choice? Crystal Balls?

In the short term, the company plans to borrow about Bt5-Bt7 billion from Government Savings Bank to boost liquidity to 15 per cent of revenue. It will also seek a Bt20 billion loan through the Finance Ministry, to further boost liquidity and pay for 5-6 new aircraft.

"There is a room to borrow upto Bt19 billion," the president said.

Surely these figures don't add up. Is it bad translation or am I missing something?

If Thai want a successful airline, take a page out of Yorkshire Airlines book. Ay oop. With a little Thainess to make the difference.

Main problem is the personnel policy.

Too Much unnecessary administrative management.

Much more important is good service staff.

Hope they hire in the future more quality service staff, like this one:

1350 pilots, isn't that a bit high for 200 aircraft?

It's a question not a comment

In the past one of the problems Thai Airways had was it it

had too many different makes,models of planes,which they

had to carry spares for ,train pilots to fly these different planes,

it seemed which new planes to buy,was not based on suitability

but on which manufacturer paid the most commission,which is

what happens when you have political interference.I don't know

if this is part of the problem for current loses.

regards Worgeordie

If I know Thailand they will be in Profit Next Quarter.

1350 pilots, isn't that a bit high for 200 aircraft?

It's a question not a comment

I was thinking the same thing so I went looking, it seems that the actual number of aircraft is 93, I found approximate figures for Air New Zealand (106 Aircraft, 1,300 pilots). Since Air New Zealand is profitable I would say that the pilot numbers aren't the problem.

by the way total employees (not just pilots):

Thai: 25,323

Air New Zealand: 11,000

The taxpayer will handle that 12 billion baht deficit just as it always has done.

THAI is not and never has been run for profit for the benefit of its shareholders. it has been run for the benefit of its employees, politicians, various other phoo yai and their familiies(who enjoy free flights in business class) for free.

And it is also important to remember that often salaries in Thai state enterprises only represent a fraction of the earning-potential of the job when the whole package is factored in (e.g. 0% loans to staff). And add in the less legal stuff (e.g. no inspection or enforcement of duty-free allowance, etc.) And then there are the staff who receive a salary but don't actually do any work. (job through family connections, often RTAF).

THAI could make money with a board and management team that understand the aviation business and have a background in the business.

But the powers-that-be in Thailand don't want that. Might lose their freebies.

...it's no secret...annual bonuses that can be the equivalent of several years' salary....

...same at AOT apparently....

I would rather walk than fly THAI. I usually drink on flights, sometimes a fair bit, but I have never got loud, rude or offensive. Anyway this one flight to London, an ageing stewardess told me after about 3 glasses of wine that she thought I'd had enough. I called for the chief steward, assured her that I was not drunk or causing offense etc. so he told the stewardess to serve me. Thereafter she came up every five minutes and sarcastically asked me if I wanted a refill. I might have to tolerate loss of face issues in Thailand, but when I have a choice I'd rather do without this childish attribute. So I generally fly with Middle Eastern airlines where the gals (and guys) are on fixed term contracts and when the 'crows feet' get a little to obvious the contract isn't renewed.

A quick look at their website suggests all the directors are Thai, all are men and nearly all ethnic Chinese if you use the 4 syllables plus in your surname = Chinese rule. What other airline with a global reach has such a restricted director base in this day and age? British Airways fro example is run in tandem with Iberia and has an international directorship structure.

"In the short term, the company plans to borrow about Bt5-Bt7 billion from Government Savings Bank to boost liquidity to 15 per cent of revenue. It will also seek a Bt20 billion loan through the Finance Ministry, to further boost liquidity..."

This is nonsense.

First, you don't increase liquidity by borrowing, especially after losing Bt12bn ! You increase liquidity by cutting costs, increasing revenues, and liquidation.

Second, THAI borrowing from GSB would be an artificial (aka "sham") transaction. Something like 50% of THAI is owned by the Government through the Finance Ministry that gives the Government control of the company. GSB is state enterprise which operates as a financial institute guaranteed by the government under the supervision of the Ministry of Finance. The government would guarantee GSB’s debt obligations through its own borrowing authority, ie., issuing treasury bonds. This is simply chasing bad money with good money, furthers more debt on the Thai taxpayers, and potentially deflates the value of the baht. This debt would also be contrary to Gen. Prayuth’s statement about the 2015 budget in that it “would not leave problems or debt for the country …” He further has stated, "I don't want to create a burden. There is no debt.”

If THAI can’t reverse its losses without borrowing, the Government needs to divest itself of THAI stock and let free enterprise determine the course and true value of the company. You have a special ready pool of buyers - the shareholders holding the remaining non-controlling stock whom face potential “pennies on the dollar” should the company go bankrupt.

Agreed, more government-backed borrowing, from government/owned-backed banks, is simply playing with numbers and increasing the eventual write-offs.

UNLESS TG can be turned-round. Which will involve painful decisions, by the major shareholder.

1350 pilots, isn't that a bit high for 200 aircraft?

It's a question not a comment

Our Aircraft

Airbus 380-800

No. of aircraft 5

Boeing 747-400 744/ 74R/ 74N

No. of aircraft 1/ 6/ 6

Airbus 340-600

No. of aircraft 6

Boeing 777-300

No. of aircraft 6

Boeing 777-300ER

No. of aircraft 8

Boeing 777-200

No. of aircraft 8

Boeing 777-200ER

No. of aircraft 6

Airbus A330-300 333/ 330/ 33H

No. of aircraft 12/ 8/ 7

Airbus A300-600

No. of aircraft 5

Boeing 737-400

No. of aircraft 5

Total 89 * Crewfactor 4 = 356 * 2 = 712

For this calculation it is important to know the exact number of machines.

These total numbers I got from the Thai Airways website.

For short range they have no (fewest) machines.

Nok Air's is domestic.

There are rumors that 200 pilots have changed company.

Every European tax official would give them a hard time

1300 up to 712 is no good.

Edited August 25, 201411 yr by tomacht8

 

Amazing how THAI can lose money when tourist arrivals have been increasing double digits in the past 4-5 years until the protest and coup. Agree that THAI airway tickets are expensive if purchase locally but when purchase overseas they are for the majority of times cheaper or same as local airlines in foreign countries. It all comes down to poor management and I suspect shareholders are being overpaid while the company rots. This is pretty common with Thai corporate companies.

 

I'm sorry thats wrong..re prices of tickets....If I search for flights Isle of Man to Bangkok return it comes out as approx £500

more in economy than say Etihad or Emirates....From Manchester only it comes out around £300 upwards dearer....And the service is very poor to what it was in late 90's early 2000....It is a very poor and expensive service and why would you fly Thai... I know some do from London as the flight is direct so I can understand that but further north no way !

on paper loss, every one in the thai air food chain got their paychecks.