Ailing national carrier Thai Airways International Plc (THAI) plans to shed 5,000 employees, scrap unprofitable routes and sell off assets, including aircraft, in a bid to nurse itself back to financial health.
Transport Minister Prajin Juntong revealed the rehabilitation plan for the airline approved by the State Enterprise Policy Committee, known as the "Super Board", on Monday. The meeting was chaired by Prime Minister Prayut Chan-o-cha.
The plan consists of five measures: reducing and, where necessary, suspending unprofitable flight routes, adjusting marketing strategies, selling assets and unused aircraft, restructuring manpower and improving non-core businesses.
According to the minister, reducing or suspending routes as well as implementing new plans for ticketing sales could be done immediately, but the other measures could be carried out next month.
THAI president Charamporn Jotikasthira said the plan to slash about 5,000 jobs will be carried out only after other measures to control and cut costs have failed.
Retrenchments will emphasise voluntary resignations with no lay-offs, he said.
Mr Charamporn said the plan to overhaul the airline will be done in stages aimed primarily at stemming losses as quickly as possible. Unprofitable flight routes will either be suspended or reduced. These account for about 10% of total flights.
Flights from Phuket to Seoul and from Bangkok to Johannesburg will be axed. The airline will also operate fewer domestic flights to Surat Thani, Udon Thani and Ubon Ratchathani and let Thai Smile, its budget subsidiary, fill the gap.
ACM Prajin said routes which continue to make losses with no sign of turning a profit will be suspended, subject to reviews over six to 18 months. Loss-ridden routes, but which have the prospect of making a profit soon, will see services reduced, with full restoration of flights possible in six to 12 months. Flights will be added on profitable routes.
For asset sales, Mr Charamporn said initially, 22 of 102 aircraft in the fleet will be sold by July. Non-core businesses such as stakes in hotels will be assessed and they may also be offloaded.
He said the airline's assets will be evaluated to see which retain business potential and deliver good returns. If they do not, they will be sold off.
THAI will also do more to improve its products and services while operating fewer aircraft models to lessen maintenance costs.
Another austerity priority is to delay taking delivery of aircraft.
Mr Charamporn insisted the airline has no liquidity problems and does not need to borrow this year though he acknowledged overall revenue might dip below 200 billion baht.
"But we will be able to stop the losses," he said.
The ticket sale system will be streamlined by reducing sales through agents, which partly explains why there are many empty seats on flights. The carrier will increase the channels for online ticket sales.
ACM Prajin said any plan which requires spending from the national budget, however, will be forwarded to the cabinet for approval, including job cuts.
Gen Prayut assured THAI will not go bankrupt.