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New Thai Airways board will nominate 4 ‘professionals’ to execute restructure

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New Thai Airways board will nominate 4 ‘professionals’ to execute restructure | The Thaiger
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Thai Airways first took off as the national airline on May 1, 1960 with its first passenger-carrying flight. 60 years later it’s now poised for a massive dissection as it enters bankruptcy proceedings and restructuring. It’s 60th birthday passed without fanfare or announcement as the pride of the nation scrambles for survival – a victim of a global pandemic, years of mismanagement, profound changes in the aviation market and a decade of accumulated debt.

A key point here is that the airline is NOT bankrupt – that’s very unlikely to happen given current and past governments’ willingness to keep the struggling airline afloat at all costs. At least now Thai Airways has a chance for real and urgent restructuring to make it an important player in the resurgence of Thai tourism and a contemporary airline business model.

Thailand’s Ministry of Transport has announced it is nominating 4 ‘professionals’ to the new board of Thai Airways who will be tasked with managing the business under the court-sanctioned rehabilitation plan. No names have been mentioned at this time.

A meeting was held on Friday between Deputy PM Wissanu Krea-ngarm, Finance Minister Uttama Savanayana and the Transport Minister to discuss the rehabilitation program. The transparent process will now be undertaken under the Thai Bankruptcy Act, as approved by the Thai Cabinet and PM Prayut Chan-o-cha.

The Finance Ministry has remained the largest single shareholder in the national airline but it has had to reduce its stake to less than 50% ownership. The Thai government lowered its equity ownership in the airline by selling a 3.2% stake.

According to a Finance Ministry filing to the the Securities and Exchange Commission, the Thai Finance Ministry offloaded 69.2 million shares to a mutual fund run by state-owned Krung Thai Bank on Friday showed. The filing did not disclose the sale price.

The sale reduced the Thai government stake in Thai Airways to 47.86% from 51.03%. This ends the airline’s status as a state-owned enterprise, one of the steps included in the restructuring plan.

Thai Airways International has recorded unsustainably heavy losses over the past two years – 11.5 billion baht and 12 billion baht in 2018 and 2019.

The Covid-19 pandemic, wreaking havoc on the global aviation industry, has dealt a particularly devastating blow to the ailing airline with all it’s planes grounded excepting a few doing minimal domestic routes and special repatriation charter flights. 6,000 staff, of the 22,000 people working for Thai Airways, have been informed they will be laid off but with a payout valued at 10 months of their wages.

What sort of 'professionals' would you add to the Thai Airways restructure board? Add as many as you wish.

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4 Comments

4 Comments

  1. Avatar

    Loutarzoon

    Sunday, May 24, 2020 at 10:34 am

    Whats the aim for such joke survey?

  2. Avatar

    Sherif Gaber

    Monday, May 25, 2020 at 10:50 am

    As Airliner expert in Aviation Science and AirLine training Captain for 40 years , I am willing and able to share my experience to restructure Thai Airways to float again , provided no ex-airforce generals are included the survival team .

  3. Avatar

    Kulkanda

    Monday, May 25, 2020 at 3:19 pm

    “6,000 staff, of the 22,000 people working for Thai Airways, have been informed they will be laid off but with a payout valued at 10 months of their wages.” – What is your source as no company-wide notice has been posted.

  4. Avatar

    Magnar Nordal

    Tuesday, May 26, 2020 at 8:46 am

    After having worked for two airline companies that went bankrupt, and one company that almost went bankrupt, I consider myself to be highly qualified.

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Myanmar cancels Thai investment in the Dawei Special Economic Zone

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Myanmar cancels Thai investment in the Dawei Special Economic Zone | The Thaiger
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The Dawei Special Economic Zone Management Committee has announced the cancellation on the deep seaport project contract with Italian-Thai Development (ITD), one of Thailand’s leading industrial firms, by saying that they “lost confidence” in the company after long, controversial issues.

The Dawei Special Economic Zone Management Committee said that the Thai company has caused them “repeated delays, continuing breaches of financial obligations under the contracts and the concessionaires’ failure to confirm their financial capacity to proceed with development”.

They say they will look for new development partners to continue the projects. Currently, there are still no comments from ITD.

The Dawei Special Economic Zone is Myanmar’s initiative to encourage international investments into the country, but the project has been delayed because of funding problems and local opposition.

SOURCE: Thai PBS World

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Business

Future of Thai department stores is being redefined

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Future of Thai department stores is being redefined | The Thaiger

While department stores have been a familiar destination for Thai people for many decades, CBRE, an international property consultant, is witnessing a decline in popularity and stunted growth, particularly in 2020 when Covid-19 adversely impacted the sector. CBRE believes that to adapt to e-commerce disruption and the changing consumer behaviour, department stores in 2021 (and beyond) will have to fine-tune their business model in terms of customer shopping experience, inventive activities and value-added programmes to continue their status as the second home for Thai shoppers.

Jariya Thumtrongkitkul, Head of Advisory and Transaction Services – Retail, CBRE Thailand explained… “While department stores offer shoppers convenience, saving them time with many varieties of goods grouped in different departments and allowing the shoppers to find and compare products and choose what they want, the traditional department store model does not fit the needs, lifestyle and behaviour of its shoppers anymore, especially the new generations.”

According to CBRE Research, the total retail supply in Bangkok as of Q4 2020 increased to 7.8 million square metres, a 1.16% increase year-on-year. Out of this, only approximately 3% was reported within the department store format. The department store market in Thailand is mainly dominated by two domestic retail giants, with Central Group and The Mall Group holding the largest market shares. They do not only concentrate in Bangkok, but have also opened department stores in many major cities throughout the country which allowed them to build bigger networks and grow their customer base.

In the past few decades, Japanese investors had also shown interest in entering the Thai market and offered local features that are well-known in Japanese department stores: simplicity, premium quality and services. However, with strong competition many Japanese department store operators have ceased their expansion plans. Some have exited the country due to the fierce competition against the local players, their performance in Thailand and the shrinking Japanese department store business, especially in overseas countries.

“The department store concept as a one stop shopping place is still in demand for certain groups of customers. However, with the e-commerce disruption and changing consumer behaviour, department store operators need to adapt their models, offerings and value-added services to their customers to cope with the challenging economic and market conditions.”

Adaptability of department stores can be highlighted into 3 main parts: customer shopping experience, inventive sales and marketing activities, and value-added programmes. While more and more younger generations prefer to shop online to save time and money, the brick-and-mortar store is still believed to be the second home for Thai shoppers. Department stores should be more agile in the era of e-commerce and adopt some technological innovations such as in-store automation and mobile payment solutions to reach the younger crowds.

Design is another aspect that plays an important part in customer shopping experience. Department stores can be more creative in remodelling traditional department store space into some ingenious and interactive space with a great design and right product portfolio mix for their customers.

The Mall Group, for example, has launched its first “Lifestore” concept at The Mall Ngamwongwan at the end of 2020 by redesigning and renovating its traditional department store space to enhance customer shopping experience and enjoyment.

The second part to be considered for the adaptability comprises inventive activities related to sales and marketing. The prices of products being sold in a department store are normally set high to cover the higher establishment and operating costs by operators, narrowing their target to only upper- to high-income customers.

Brand offerings may also no longer meet fast-changing customer needs since today’s shoppers have more choices in buying products online, not to mention the declining footfall due to the growth of e-commerce. CBRE Research has seen domestic players pushing hard to drive sales growth via numerous promotions, marketing campaigns and activities and collaboration with credit card companies during seasonal sales.

The third part consists of value-added programmes such as personal shopper, customer loyalty programme, on-demand solution and service personalisation, which have become a new trend as customers, including the aging population, are now more sophisticated and demanding.

The retail landscape has changed drastically in the past few years from various factors like technological advancement, consumer behaviour and preference as well as Covid-19. Cookie-cutter strategy will be a thing of the past, especially for department stores where the format and offerings have remained the same for decades.

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Interview with Bill Barnett from c9Hotelworks. Phuket has now been hit with a 3rd major crisis, each one more profound than the long-term effects from the 2004 tsunami. Now the island has new restrictions imposed on arrivals on the southern island, imposed by the Phuket Provincial Authority.

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