As THAI's new management team is struggling to get the ailing flag carrier back in the black by 2022, the public looks on with anxiety. Will there be a miracle?
I am quite optimistic. The new team may be able to rescue our THAI the same way as Kazuo Inamori, CEO of Japan Airlines, managed to rescue JAL -- which was faced with a financial crisis -- in a short time. JAL's US$20.5 billion debt problem was far more serious than our national carrier's. Mr Inamori has just visited Thailand and shared his experience with his counterparts.
THAI reported losses of 12 billion baht in 2013, 15.6 billion baht in 2014 and 13.1 billion baht in 2015. The company turned a marginal net profit of 15.1 million baht in 2016, but its financial situation deteriorated again in 2017 when it posted a net loss of 2.1 billion baht. In the first six months of this year, the company posted a net loss of 381 million baht.
In the past 10 years, THAI's market share tumbled from 37.1% to 27.1% due to tough competition and the emergence of low-cost airlines.
THAI is one of six financially-ailing state firms that have undertaken business rehabilitation as required by the State Enterprise Policy Commission, known as the Superboard. The others are the State Railway of Thailand, the Bangkok Mass Transit Authority, TOT Plc, CAT Telecom and the Islamic Bank of Thailand.
During his visit to THAI's headquarters earlier this month, Deputy Prime Minister Somkid Jatusripitak said the new management under chairman Ekniti Nitithanprapas should learn from JAL's experience.
Mr Somkid said the government is ready to support the airline to move forward, but the airline needs to have clearer strategic plans, particularly for aircraft procurement. The DPM affirmed that money is not an area of concern.
In fact, he seemed receptive to the company's procurement plan, which will see the company add 23 new aircraft to its fleet with a total value of over 100 billion baht. Mr Somkid told the management team to submit its aircraft procurement details by the end of this year, so it could proceed with the purchase quickly.
During his visit to THAI's headquarters, Mr Somkid impressed the company staff by giving a wai to everybody as he stepped into the meeting hall. It's the body language that seemed to suggest how much he values their role in the making of a miracle.
Mr Somkid told management, in particular Mr Ekniti, to come up with a strategic and purchase plan by end of the year. The plan must contain clear strategies complete with details on how the plan will help boost THAI's competitiveness, revenue management systems, traffic and routes, the rate of aircraft utilisation and workflow.
He wanted Mr Ekniti, who is also head of the Revenue Department, to concentrate on the rescue plan. The government via the Finance Ministry holds 51.0% of the company shares.
The THAI chairman said the carrier aims to join the world's top five airlines by 2022. To achieve that goal, the airline must turn a profit and enter into more airline alliances. THAI's new president Sumeth Damrongchaitham said THAI aims to get back into "sustainable" profit by 2022.
Mr Ekniti's clean image should allow him to gain support from the company's staff. And that will contribute significantly to the flag carrier's attempt to turn around amid fierce competition, especially with low-cost airlines.
He repeated several times about the need to maintain transparency.
THAI was tainted with a corruption scandal that emerged in a report from Britain's Serious Fraud Office when Rolls-Royce admitted to paying about 254 million baht to individuals to help it secure a deal to sell THAI Trent 800 engines for six Boeing 777 aircraft and Trent 500 engines for seven Airbus A340 aircraft.
It's understood that the bribery took place between 1991 and 2005 and involved payments totalling about US$36.38 million (1.28 billion baht) to "regional intermediaries". However, a probe on the scandal did not go anywhere.
The rescue of the ailing national flag carrier is a tough job. But Mr Ekniti, with his high calibre, integrity, and dedication, should be able to lead THAI out of the doldrums, so once again, all Thais could use the company's service with pride.