According to the President of Star Alliance member airline Thai Airways, the Bangkok-based carrier is on the verge of shutting down if they don’t succeed quickly in a turnaround. The government has given the airline one month to come up with a new cost-cutting plan.
Thai Airways International (THAI) president Sumeth Damrongchaitham said on Tuesday that staff must cooperate with the airline’s rehabilitation efforts because it is in a crisis and faces possible closure.
…”Today I want staff to be united to overcome the obstacles. Otherwise, the national airline must close down. There is still time for a solution, but there is not much time,” Mr Sumeth said.
The carrier lost $211 million in the first half of 2019, bringing total losses to $9.2 billion. The country’s national airline has traditional been run as a cronyist enterprise, benefiting its stakeholders, but its business has been eroded by low cost competition.
Over the summer the airline’s President introduced a six point plan to crowd source cost cutting ideas; reduce food waste; make a ton of money flying to Sendai, Japan; collaborate with a local gas station cafe chain; and platitudes but it was (shockingly) insufficient.
Thai’s new plan is to “reduc[e] the salaries of managerial staff ” and follow “a zero inventory policy at its catering department” according to the carrier’s President. What’s more, “[t]here will be no other rewards for the staff, because the top prize is the survival of the company.”
I had such high hopes for the airline’s earlier plan to profit by selling frozen foods.
That, apparently, is working out about as well as United’s decision to gut its elite program in order to focus on its core cookbook business.
[…] October the President of Thai Airways told employees that the airline was on the verge of shutting down with only a month’s runway to execute a turnaround. The airline promptly worked to walk that […]