Thai Airways : biggest quaterly losses in 10 years and plan to reduce workforce

Is there a captain on board ?, I asked in june regarding Thai Airways, following some insane news (the board fired the president… before to recall him a few hours later) …

I wrote at that time : “Expensive jet fuel is already hurting all the airlines around the world… Even the best ones… So, it’s not difficult to imagine that Thai Airways is going to suffer. Extremely. ”

Well… the financial situation of the national carrier is indeed getting worse.

Thai Airways International Pcl has offered early retirement to 400 to 500 staff after notching up a second-quarter net loss of 9.3 billion baht ($276.8 million), the national carrier said Thursday.

President Apinan Sumanaseni said the airline’s executive board had approved a budget of 700 million baht to encourage employees to opt for early retirement as part of its cost-cutting efforts this year, the Manager newspaper’s website said.

On Wednesday, Thai Airways announced its second-quarter results, which were its worst performance in 10 years. The loss was attributed mainly to higher fuel prices.

Besides the staff cuts, Thai Airways also has announced the cancellation of several unprofitable routes, such as Bangkok-New York and Bangkok-Oakland.

The airline, however, has boosted its daily flights to Sydney and Melbourne to accommodate rising tourist traffic from Australia to Thailand. (Bangkok Post)

And it’s probably not finished. On Q2, oil prices went from 100 to 140 USD per barrel. Since july 1, from 145 to 115 USD now. Even at these levels, oil remains expensive and will continue to (de)pressurize If I may say the financial results of airlines on Q3 and beyond…

And particularly… Thai Airways.

6 Responses to “Thai Airways : biggest quaterly losses in 10 years and plan to reduce workforce”

  1. 1 fall 14 August 2008 at 1:39 pm

    If laying off 500 employee would save the company 9.3 billion baht a quarter, that’s roughtly equal salary of 6 million per month/employee. Then the company would either loose an extremely talent personel who top that much pay or this is just a lame excuse present as solution.

    Cost saving is well and nice, but clearly this is not the main cost that need cutting. Thais know it’s the fuel price, but if this is all they can think of. Then better prepare for more loss on Q3…

  2. 2 ThaiCrisis 15 August 2008 at 12:24 am

    I would be less assertive here… Thai Airways, like many other public companies (public = owned partially or totally by the State, or with the State as the biggest shareholder), is a black hole as far as staff is concerned.

    Exactly like SRT (read here).

    Thai Airways has always been a lolipop for the military, their friends, cousins, extended families, and cronies…

    It means : over staffed.

    So for the carrier to announce such plan is clearly a good thing. A first step. Even though we have to note that these 500 employees would not be fired.

    But I agree It won’t, absolutly not, solve the issue.

    The truth is : with oil over 100 USD per barrel, Thai Airways in its current configuration, can’t be profitable.

    The wake up call is going to be painfull…

  3. 3 MSB 15 August 2008 at 4:14 am

    THAI has no value whatsoever in the economy. They should scale down to be a regional carrier. There is no justification for them to be flying long haul. They lose money every km they fly. Sell it to SIA….

  4. 4 Rockderk the Great 15 August 2008 at 8:19 am

    In this day and age, with even the national carriers of real countries struggling to stay afloat -and generally losing- I believe the only hope left for Thai Airlines is to convert the entire fleet to LPG.

  5. 5 ThaiCrisis 15 August 2008 at 9:29 am

    Watch out… they plan to increase the price of LPG.

  6. 6 fall 15 August 2008 at 4:58 pm

    Even better, a couple months back. There was a prototype flight using whole… bio-diesel fuel!

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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