As Thai Airways International Plc (THAI) faces a crisis, its newly chosen president Charamporn Jotikasthira has been hailed as a beacon of hope by THAI staff.
Charamporn: Faces tall challenge
The company's board of directors expect him to steer the national carrier through hard times, help boost its competitiveness on the world stage and restore its ledgers to the black in coming years.
Mr Charamporn, a former Stock Exchange of Thailand (SET) president, was among four candidates nominated for the post by a selection committee, and on Nov 12, the board thrust him into the top job. He is expected to start work this month.
Mr Charamporn has experience in running big organisations, especially in areas related to information technology.
Over the past decade, the global aviation industry has undergone significant changes in technology, aircraft development, ticket pricing, and a proliferation of new airlines, particularly budget carriers that have wrested market share from their struggling higher-cost rivals.
THAI especially has been unable to adjust to the shifting aviation landscape and the company's financial standing has experienced ups and downs over the past decade, analysts said.
In 2004, the national carrier posted a profit of 10 billion baht. In 2005, its profit slumped to 6.77 billion baht. In 2007, the profits fell to 4.36 billion baht. Then, during the 2008 global recession, the company suffered a heavy loss of 21.3 billion baht.
In 2010, THAI's profit rose to 14.79 billion baht, sank to a 10.19 billion baht loss the next year, and swung back the year after that, posting a 6.50-billion-baht gain. Last year and during the first nine months of this year, THAI losses have amounted to more than 21 billion baht.
Political interference — particularly in the selection of its president — has also dealt blows to the company.
Until 2000, THAI presidents were appointed. Since 2000, five THAI presidents have been chosen through a selection process and hired on a four-year contract.
As it happens, each of those five presidents could not complete their four-year tenures, and each left office prematurely in departures seen as resulting from internal politics.
Former THAI president Piyasvasti Amranand, who enacted belt-tightening measures resulting in a profit of nearly 15 billion baht in a decade, said THAI is a SET-listed state enterprise operating in line with civil service regulations, so lacks flexibility in management.
He said new airlines have emerged and vied for market share, but the state carrier hasn't been able to adapt.
Mr Piyasvasti said many people still believed THAI will never go bankrupt, but they are not aware the company has begun to lose its competitiveness.
Banyong Pongpanich, a former member of the THAI board, has said one solution for THAI is privatisation — with shares to be held by Thai people and not the Finance Ministry — to prevent politicians from seeking benefit from it.
Mr Banyong said the company's financial losses in 2011, 2013 and 2014 has caused its debt-to-equity ratio to rise to 5:1.
He also expressed concern about whether THAI can compete with regional rivals when the Asean Community is launched by the end of 2015.
Sorachak Kasemsuwan, another former THAI president, said the state carrier still has problems selling tickets. It must devise a strategy that includes promotional campaigns with discounts designed to sell as many tickets as possible, he said.
"The marketing division needs an overhaul. THAI must increase sales targets via the online ticketing system each year," he said.
Mr Sorachak also said if THAI suffers heavy losses, the government should not step in to help or increase subsidies. Instead, the government should let the company collapse to open up new opportunities in its wake.
Jaemsri Sukchoterat, the former chairwoman of the THAI union, said THAI has been plagued with political interference. In particular, she noted that THAI presidents have always exited during political power shifts.
This has led to a lack of continuity in the company's policies, Ms Jaemsri said, adding the low morale has led several capable managers who have worked for several years to gradually resign.
"Many THAI staff are still confident this organisation will never collapse. Their work still clings to an approach from an old era when there was no competition," she said.
As for the new president, Ms Jaemsri said this is a good opportunity for Mr Charamporn to overhaul the organisation and put "the right employees in the right jobs".
She said improving the company's three lines of operation — commerce, strategic and business development, and human resource development — will help solve the company's problems.
This will prove whether Mr Charamporn has what it takes to restore the staff's confidence and win their support to steer the company through the crisis, Ms Jaemsri said.
Mr Charamporn should get on well with the THAI board as he is acquainted with Areepong Phucha-um, permanent secretary for energy, who is acting chairman. Mr Areepong has acknowledged Mr Charomporn's abilities as the new THAI president.
Mr Areepong said the new president, the board and THAI staff must work together to help the company.