Peter Principle : desperate Thai Airways relies on… government officials to fill its aircrafts and seeks 1 billion USD

Here is the perfect illustration of the Peter Principle applied to corporate arrogance and silliness.

Thai Airways International has sought co-operation from the Comptroller General’s Department to strictly ensure that all air travel by officials of government agencies, state enterprises and public organisations is on the flag carrier.

It is responding to calls by some officials for flexibility in the fly-THAI directive so that they can use foreign airlines for reasons such as lower fares, service preferences or better connections.

Although the long-standing official rule restricts government travel, both domestic and overseas, to THAI, exceptions have been allowed in recent years to allow travel on foreign carriers if the fares are 10-15% lower than those charged by THAI and it does not serve the routes.

But the national carrier wants the original rule to be strictly enforced now to protect the one billion baht in annual business from this captive market.

THAI executives complained that some officials were making all kinds of excuses for not flying THAI even though it could accommodate their needs and match offers by any foreign carriers.

THAI has an extensive network itself, and coupled with its Star Alliance partners including Lufthansa, one can virtually fly anywhere in the world, one THAI executive pointed out.

“In several countries including Indonesia and the Philippines, government travel must only be made on their national carriers. No excuses whatsoever,” another executive added.

After all, THAI is majority-owned by the state, he noted.

THAI is taking a number of survival measures as it braces for its first loss in 45 years in 2008. It booked a loss of 6.61 billion baht in the first nine months, due largely to high fuel prices and a downturn in travel demand. (Bangkok Post)

You bet “some officials are making all kinds of excuses for not flying Thai ” ! Expensive tickets, shitty aircrafts… some B747 are 25 years old when the competition (Singapore Airlines, Emirates etc.) use new airplanes…

Facing huge difficulties (and read here), the arrogance and the incompetence of the national carrier lead to even greater problems.

Unable to evolve and to be really competitive… Thai Airways is cursed to toy… with “captive markets” and other “monopolies”.

Not sure It’ll be enough… To survive. 😉


Read also : Thai Air Slumps to 16-Year Low After Seeking Government Funds (Bloomberg)

And :

Thai Airways International THAI.BK said on Wednesday it was seeking nearly $1 billion in funding after the closure of airports by political protests last year added to problems caused by the global economic slowdown.

Thailand’s national carrier said in a statement it was looking for up to 34 billion baht ($974 million) in loans from financial institutions — 19 billion baht for working capital and 15 billion baht for refinancing short-term loans.

We need the funds as soon as possible,” a Thai Airways official told Reuters, without giving details. (Reuters)

2 Responses to “Peter Principle : desperate Thai Airways relies on… government officials to fill its aircrafts and seeks 1 billion USD”

  1. 1 Bedwyr 22 January 2009 at 10:58 am

    There is a piece in one of today’s worthless Thai newspapers, that the Finance Minister has had to tell the THAI Board to prepare financial strategy to deal with their problems.

    One presumes that tomorrow he will teach them how to think for themselves. How much do Thais pay these idiots? 10k a month? 5k?

    Whatever it is, its too much.


  2. 2 fall 22 January 2009 at 1:30 pm

    Not surprising, given the fact that every Thai Board MUST consist of at least one air force bigwig.

    Other country government also have such policy as Fly-(country name) Act, even with much stricter rule of not able to fly foreign carrier domestic or outbound at all. But the major reason for thai bureaucrat to fly foreign carrier would be kickback.

    How does a company that employ an outsource at 30 Baht per hour to do the catering manage to loose money is beyond me. Time to bite the bullet and shred all those fat, TG.

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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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