Bangkok - Thai Airways International (THAI) is recovering well from the global slump in passenger numbers but needs an extraordinary rejuvenation to regain its "rightful" place as one of Asia's top airlines, the national carrier's president said. "We have seen the bottom - 2010 and 2011 should be better, even in the face of very intense competition," THAI president Piyasvasti Amranand said on Thursday.
Piyasvasti noted that although passenger numbers were picking up the yield was being kept "very low" because so many airlines were scrabbling for business, particularly low-cost airlines and carriers flying out of the Middle East.
THAI suffered a loss of 21.3 billion baht (647.8 million dollars) last year, blamed partly on high oil prices, but "might" break even this year, he said. Management of THAI, which is 51 per cent government-owned, has been subject to political influence in the past and many experts say it remains sclerotic and faction-ridden.
"We need to get rid of corruption in Thai Airways. We need to get rid of nepotism in Thai Airways," Piyasvasti said. But after five months in the job he also said "staff at Thai Airways are surprisingly good. Much better than I expected."
However, he also said that the corporate culture inside the airline was "more bureaucratic than the civil service" even though the carrier has enjoyed managerial autonomy. "They did it to themselves," he said.
Quick gains in efficiency are being made by making 11 billion baht in operational cost cuts, with aircrew staying, for example, in cheaper hotels and by giving golden handshakes to highly-paid but "tired" older cabin crew.
The airline also plans to cut many non-strategic loss-making routes or give them to Nok Air, the emerging low-cost carrier 40-per-cent owned by THAI.
"We have a smaller fleet than Singapore Airlines but we fly to more destinations," Piyasvasti noted. THAI's fleet was also unacceptably old with an average aeroplane age of 11.7 years compared to Singapore Airlines' average of six years.
The first delivery of eight Airbus A330s is due in January and deliveries of the six Airbus A380 superjumbos is to start in 2012. Other aircraft can be leased, he added.
Aircraft purchases are to be complemented by a vigorous programme of cabin refurbishment to combat the widespread impression that THAI's service is inferior to its major rivals. "Within two years our product will be of high quality and consistency," he said.
As an example of "quick gains" that can be made, Piyasvasti cited the widespread impression that rival airlines like Singapore and Quantas offer better meals - even when flying out of Bangkok these meals are made in Thai Airways kitchens. "This sort of thing can't be allowed to go on," he said.
