No plan for major lay-offs, says THAI president

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THAI
No plan for major lay-offs, says THAI president
The Nation

BANGKOK: -- Reduction of staff will not be among the priority measures for financially strapped national carrier Thai Airways International under its two-year cost-cutting exercise, company president Charamporn Jotikasthira said.

During an interview to Nation TV on Tuesday, Charamporn, who was appointed to head the airline two months ago, said the junta's "superboard" overseeing all state enterprises had last month set THAI's cost-reduction target at 20-30 per cent.

"If we have good discipline in reducing other unnecessary expenditure, then reducing staff overhead will be one of the last factors as a cost-cutting measure. They have worked with us for a long time and if we need to lay off people in our organisation, appropriate packages will be offered to them and it will be voluntary," Charamporn said.

He added that in the event of any staff reduction, the airline would provide early-retirement packages to staff aged over 50. Each division within the airline would have its own considerations in reducing non-performing and overlapping job functions. Each division will have their own measures based on necessity.

THAI has already reserved a budget for any staff compensation under its plan.

"It will take many months from now for us to consider any lay-offs. Staff salary now accounts for about 24-25 per cent of total costs, which is lower than air carriers in Europe," he said.

Charamporn said that the airline had no any extra benefit to provided to its staff at the moment.

"Our staff have a lower salary base, though they may be higher on overtime. Such high expenditure in our organisation may be driven by the larger number of staff as well as lower operational efficiency," he said. Charamporn said THAI had earlier reduced expenditure by up to Bt10 billion. He said cost reduction this time would not be less than that.

"Even our board members do not get any extra benefits from the company. The patronage system should be eliminated to make the national airline more competitive. We need to compete with rivals that have great capability and operational efficiency," he said.

Charamporn said that as THAI is a large organisation, it needed to follow the management bible strictly to improve its efficiency. "Staff will have to work harder and they need to wake up to this time of change if we don't want to be in serious problems like many other Asian airlines," he said.

Charamporn said that since 1982, when Thai Airways was the No 1 airline in the world, all of the airline's major advantages had disappeared.

Thailand used to enjoy a geographical advantage as a transit point for many airlines flying to Japan, Australia or the Philip-pines. However, current capacity enables planes to fly to long-haul destinations without any stops.

"We are also facing new rivals in the Middle East, which have unveiled a strategy to make themselves the hub for any aviation routes. Thailand, Singapore and Hong Kong as a result have disappeared from the map," Charamporn said.

"We also face stiff competition from low-cost airlines for distances not exceeding two hours of flight. The model occurred 20 years ago in Europe and is being applied to Asia Thailand has seen strong penetration by low-cost airlines, which have adopted strong management strategies. They have six flights a day with only 20 minutes' turnaround, while Thai Airways has only four flights a day with 45 minutes' turnaround," he said.

Charamporn said the competition among airlines would be more intense in the future. Low-cost airlines alone would order 1,200 new aircraft in the next 10 years, and another 1,000 aircraft will be ordered by large-scale airlines during the period. THAI will hence need to operate with high levels of efficiency if it wants to survive this severe and intense competition.

"Our direct competitors will be full-service carriers. We will not compete with low-cost airlines, but our THAI Smile will compete with them."

Source: http://www.nationmultimedia.com/business/No-plan-for-major-lay-offs-says-THAI-president-30252878.html


-- The Nation 2015-01-29

[PepperMe]

Why be so afraid of layoffs?

That is one of the first things that happens in the west when a company is struggling.

If it is good enough for the biggest companies in the world, I am sure it is good enough for Thai Airways.

Anyway.... Privatise it 100% and let some real experts run it properly instead of it constantly having to suffer massive losses at the hands of "the boys" parachuted into their positions because of who the know.

[ChrisY1]

"If we have good discipline in reducing other unnecessary expenditure,"

So nothing's going to change really.......they are obviously very nervous about reducing their massive staffing numbers.......the 5000 figure mentioned a couple of days ago was obviously never meant to be released.

Reducing unnecessary expenditure........the freebies will continue......!

[trogers]

Yep, we would sell all our aircrafts and cut down on service routes without the need to lay off any staff.

[Valentine]

"If we have good discipline in reducing other unnecessary expenditure,"

So nothing's going to change really.......they are obviously very nervous about reducing their massive staffing numbers.......the 5000 figure mentioned a couple of days ago was obviously never meant to be released.

Reducing unnecessary expenditure........the freebies will continue......!

The huge elephant in the room is never mentioned. They are long overdue to be more selective on who gets free flights & upgrades.

[steve187]

Its like the blind leading the blind.

If staff costs are so low, reduce prices to compete with the middle east carriers.

update the planes and get rid of everyone of 50 that doesn't know how to smile.

[Ricardo]

How can an over-staffed company cut routes, and sell-off unwanted aircraft, but not also simultaneously reduce the number of people needed to operate their smaller business, it just doesn't make sense ?

"We also face stiff competition from low-cost airlines for distances not exceeding two hours of flight. The model occurred 20 years ago in Europe and is being applied to Asia Thailand has seen strong penetration by low-cost airlines, which have adopted strong management strategies. They have six flights a day with only 20 minutes' turnaround, while Thai Airways has only four flights a day with 45 minutes' turnaround," he said.

The model was developed more-than 20 years ago, in the USA, and copied 20 years ago in Europe, for those who were aware of how their industry was changing !

And I doubt very much that THAI actually turn round their planes as quickly as claimed.

And I believe that the LCCs actually get a lot more than six sectors per day, out of their aircraft, the competitive-gap is much bigger, than claimed !

"It will take many months from now for us to consider any lay-offs.

Translation :- 'we still don't see any need to move swiftly, or take necessary painful decisions, as the government will continue to carry our mounting losses' ?

we don't want to be in serious problems like many other Asian airlines

Too late ! You already are in serious problems ! Wake-Up, for heavens sake !

Edited January 29, 2015 by Ricardo

[Diplomatico]

Interesting because two days ago this story said that THAI - with the ruling military junta's approval - was going to cut 5,000 jobs:

"The State Enterprise Policy Committee has approved in principle Thai Airways International's rehabilitation plan, which was discussed in a meeting on Monday chaired by the prime minister.

Measures will include a reduction of the airline's staffing by 5,000 and cancellation of its non-performing routes. THAI is one of even troubled state enterprises. In the first nine months of 2014, the airline suffered losses of Bt9 billion. It recorded a loss of Bt12 billion in 2013. The rehabilitation plan will see its workforce slashed from 25,000 to 20,000."

http://www.nationmultimedia.com/national/National-airline-to-downsize-and-reduce-routes-30252743.html

[Robroona]

Wonder who told him Hong Kong and Singapore had disappeared? For its size, Singapore has a very large airline

[Strangebrew]

The problem with Thai airways is simple to many chief's and not enough Indian's You got over paid managers over seeing a few employee's each when you could have one manager overseeing two to four supervisors. IE counter and check in side then departure arrival side simple. With 1 general manager in charge of ground operations. To which the managers report to the GM report to the board.

[ezzra]

He knows very well not to mess with the hornet ness of the very strong union there

if he doesn't want a major strike on his hand..

[Thian]

They are too soft again so nothing will change. Taxpayers will get the bill.

As long as i can fly cheaper and better with other airlines i won't fly Thai, period.

[geriatrickid]

Interesting because two days ago this story said that THAI - with the ruling military junta's approval - was going to cut 5,000 jobs:

"The State Enterprise Policy Committee has approved in principle Thai Airways International's rehabilitation plan, which was discussed in a meeting on Monday chaired by the prime minister.

Measures will include a reduction of the airline's staffing by 5,000 and cancellation of its non-performing routes. THAI is one of even troubled state enterprises. In the first nine months of 2014, the airline suffered losses of Bt9 billion. It recorded a loss of Bt12 billion in 2013. The rehabilitation plan will see its workforce slashed from 25,000 to 20,000."

http://www.nationmultimedia.com/national/National-airline-to-downsize-and-reduce-routes-30252743.html

Thai has a natural attrition in its lower end jobs, the ones without the benefit of staffing agreements which ensure a job. I expect that the people who we do not see, but who are of importance for customer service will be the first to go and not be replaced;

- Cleaners

- clerical staff in the backroom

- contracted and part time employees

- baggage handlers

- catering personnel

All are at the low end of the pay & benefits scale. We may see a slow shift to fewer cabin FAs as some retire and are not replaced.

[maidee]

my bets are on : even more increasing the fares for the customers

thai logic , you know

[Fat Haggis]

In others words, the CEO has told the PM in covert language to go forth and multiply !! Can you run an airline from an attitude adjustment camp?

[ginbkk]

So this zombie will crawl along and tax payers get the bills.

Really!

[FangFerang]

Yesterday they announced that flights and routes would be reduced. Of course that means there will be lay-offs (do they think the employees are not right now making discreet inquiries to other vendors?).

The only thing more baffling than a nationalistic sense of superiority is the firmly held belief that one Thai in a position of authority thinks that other Thais, especially subordinates, are stupid.

Amazing Thailand.

[chotthee]

Yesterday they announced that flights and routes would be reduced. Of course that means there will be lay-offs (do they think the employees are not right now making discreet inquiries to other vendors?).

The only thing more baffling than a nationalistic sense of superiority is the firmly held belief that one Thai in a position of authority thinks that other Thais, especially subordinates, are stupid.

Amazing Thailand.

"one Thai in a position of authority thinks that other Thais, especially subordinates, are stupid."

What are you talking about? THAI is not stupid.

[trogers]

How can an over-staffed company cut routes, and sell-off unwanted aircraft, but not also simultaneously reduce the number of people needed to operate their smaller business, it just doesn't make sense ?

And we have now identified the real cause of all the troubles. The competition is laughing, probably because of these words of wisdom from a top-class management.

[Keesters]

Initial layoffs should be the board of directors who got Thai in the **** in the first place.

Edited January 29, 2015 by Keesters

[h90]

Why be so afraid of layoffs?

That is one of the first things that happens in the west when a company is struggling.

If it is good enough for the biggest companies in the world, I am sure it is good enough for Thai Airways.

Anyway.... Privatise it 100% and let some real experts run it properly instead of it constantly having to suffer massive losses at the hands of "the boys" parachuted into their positions because of who the know.

If you privatize it you can't get your silly useless daughters a job. You can't get former politicians a manager job, you can't buy new airplanes and and cash in 10 % for the next vote buying, you can't let your family members fly free in the first class by buying only the cheapest economic ticket.

So what would be the benefit of privatizing?

[trainman34014]

Basically what this Guy is saying is don't expect any changes to the comfortable lifestyle they are all living at this airline geared up as a rich people of Thailand's club airline. I would love to see a Western time&study expert let loose on all the deadwood that must exist within. Chances are that about a third of the people on the payroll would not even be found !