THAI’s low-cost carrier plan stalls

PHUKET: Plagued by financial losses, Thai Airways International (THAI) has decided to drop plans to establish a low-cost carrier airline by 2013.

The chairman of the board, Ampon Kittiampon, confirmed on August 9 that, given the company’s recent financial under-performance, launching a low-cost carrier would not be included in this year’s strategic business plan.

Dr Ampon told the press that he was unhappy with the airline’s performance, which recorded a loss for the second quarter of 2012.

“From now, THAI will spend more time improving its financial performance so that it returns to profitability after suffering losses of 10.2 billion baht last year,” said Dr Ampon.

For the remainder of this year, THAI intends to focus on its sister company THAI Smile, which was launched early last month.

After three to six months of operation, they will evaluate THAI Smile’s performance, he said.

THAI Smile, the prodigy of former THAI president Piyasvasti Amranand, claims that its Bangkok-Macau route has a cabin factor satisfaction rating of more than 80 per cent.

One area of contention and a likely cause of friction among board members is the possibility of a restructuring of board membership.

An anonymous source at THAI indicated that some key positions held by people with strong ties to Mr Piyasvasti, who was removed as THAI president in May, may move on as a result of their poor performances that contributed to the second-quarter losses.

Those likely for the chop would include commercial branch executive vice president Pandit Chanapai; product and customer services executive vice president Teerapol Chotichanapibal; and corporate communications and public relations vice president Sunatee Isvarphornchai.

However, the threatened reshuffle has not been welcomed by some factions of the board who are keen that their objections are taken seriously by the new leadership.

The board will also consider downsizing the firm’s public relations department.

Looking further into the future, THAI’s acting president and executive vice president, Chokchai Panyayong, said that it was essential for the national carrier to launch a low-cost airline in order to get a share of the market.

“Domestically and internationally the low-cost carrier market has seen continuous growth, a trend predicted [to] increase once ASEAN 2015 comes into being. Furthermore, the sister airline would strengthen the airline’s role in the aviation industry,” Mr Chokchai said.

THAI currently plans to task Nok Air, a low-cost airline in which it holds a 49 per cent stake, to conduct research to identify potential future business opportunities. If those findings are favorable, a THAI-Nok Air joint venture would be the next step, with THAI procuring a larger stake in Nok Air.

— The Nation