Thai Airways receives in-principle approval for transformation plan

Thai Airways received (26-Jan-2015) in-principle approval from Thailand's State Owned Enterprises Commission Board for its transformation plan. The plan is designed to reverse the trend of losses incurred over the past five consecutive quarters and includes identifying problems faced by the company, developing initiatives to address the problems, establishing a timeframe for each milestone, establishing key performance indicators and ensuring sufficient capital and liquidity to support the transformation process. The plan is divided into the following three stages:

• Mitigate losses by cutting loss-making routes and increasing revenue generation on routes with strong performance or growth potential. Total ASKs will decrease by approximately 10%;
• Build the carrier's competitiveness in the areas of product, service and human resources while enhancing its ability to earn revenue and improving cost control;
• Grow the company's business on the back of new organisation strengths to ensure long-term sustainable profitability.

The plan incorporates the following six strategic initiatives:

• Network strategy: Improve network, destination selection and route performance. Routes to be suspended may include Bangkok-Johannesburg and Phuket-Seoul;
• Fleet strategy: Rationalise the number of aircraft and aircraft types. The airline plans to sell 22 aircraft by the end of Jul-2015 and take delivery of three aircraft in 2015, with other deliveries to be postponed;
• Commercial strategy: Enhance the ability to earn revenue;
• Operations and cost strategy: Adopt international best practice and improve cost control;
• Organisation strategy: Adopt a structure suited to the new competitive environment along with an appropriate remuneration policy;
• Portfolio strategy: Adopt a systematic approach to manage core and non-core businesses. [more - original PR] [more - original PR - 2]