Thailand PM Jumps to the Rescue of Thai Airways International

Thai Airways, TAT, air transport, Thailand, strategy

Thai Airways

The Bangkok Post reported that Thailand Prime Minister Prayut Chan-o-cha will step-in into the rescue of national carrier Thai Airways International thanks to a new tourism campaign. 

Prime Minister Prayut Chan-o-cha is travelling this coming Wednesday to Lamphun to preside to the launching of a new tourism campaign “Go Local” and will take the opportunity to reaffirm its willingness to help Thai Airways International (THAI) recover from years of losses.

Talking to the Bangkok Post, Ekniti Nitithanprapas, chairman of the THAI board explained that General Prayut’s actions indicate his concern for the airline’s rehabilitation plan, whereby Thai Airways International aims to turnaround from losses to profit in the next four years (by 2022) and become a premium national airline for the domestic market in 2020.

Following the nomination of a new President after almost a year of vacancy at the head of the airline, Deputy Prime Minister Somkid Jatusripitak ordered THAI president Sumeth Damrongchaitham to present before the end of the year with a rehabilitation plan integrating new business strategies as well as a revision of aircraft fleet needs. The company earlier this year announced an aircraft procurement plan for 23 new aircraft representing an investment of almost US$3.5 billion (THB100 billion). However, the government is looking now at Thai Airways reevaluating the request and come again with a revised plan for its new fleet.

There is however no doubt that THAI needs new aircraft to stay afloat compared to its competitors: “Yet the airline needs modern aircraft to improve products and services and enhance competitiveness, but I want to ensure transparency, which needs careful decision-making,” Mr Ekniti said to the newspaper.

THAI Chairman Ekniti admitted the company is facing several challenges, including increasing jet fuel prices. The chairman highlighted also the fact that THAI has been slow to embrace the digital economy and diversify its revenues. The airline will need to improve digital solutions and online channels in order to reach out to more customers and catch passengers from other airlines.

Moreover, THAI will source income from non-aviation products and services such as catering, ground handling and freighter services. The Bangkok Post stressed that revenue from non-aviation services represents just 3% of THAI’s total revenue, while other major airlines earn up to 20%.