Thai Airways will restructure after a large 2Q2014 loss. Using subsidiaries and partners essential

Thai Airways is embarking on a restructuring aimed at turning around the ailing carrier after a large loss in 2Q2014. Thai's performance has been significantly impacted by political instability, which has scared away tourists, but the flag carrier also has large longstanding issues which prior restructurings have not resolved.

Job cuts and capacity adjustments should help Thai's long-term position. But competition in Thailand continues to intensify, particularly from low-cost carriers.

Thai's strategy also desperately needs a refocusing. The group's decision to move regional subsidiary Thai Smile from Bangkok Suvarnabhumi, where Thai Smile has been feeding Thai Airways, to Bangkok Don Mueang is particularly puzzling. Thai Airways is also planning to launch Dusseldorf at a time the European network needs to be restructured.