Thai Airways challenges open skies as it confronts huge debt

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How to tackle Thai Airways’ outstanding debt of about AUD 4.8 billion? Why not ask customers and staff for suggestions – that’s one prong of a new cost-cutting strategy proposed by the airline.

THAI president Sumeth Damrongchaitham said on Tuesday that intense competition had affected the operating results of all airlines. Thai Airways International has announced steps to slash expenditure and boost revenue in a bid to shrink its accumulated debt of around THB 100 billion (about AUD 4.78 billion).

Sumeth admitted that in the 11 months he had been in the job, “there was never a day without a problem”, the Bangkok Post reported.

IN a parallel move, the airline is urging Thailand’s government to re-examine the Kingdom’s “open skies” aviation policy. While Thailand is open to foreign airlines, several countries fail to reciprocate, which is unfair to Thai airlines, Sumeth charged.

External factors to have hit THAI recently include the strong baht, the continuing US-China trade war, a lacklustre global economy and the closure of Pakistani airspace after friction with India. Now it’s the Hong Kong crisis – a Thai Airways flight to Hong Kong was forced to return to Bangkok on Monday when protesters shut down Hong Kong International Airport.

According to the Bangkok Post, one aspect of Thai Airways’ new cost-control strategy, tagged SaveTG Co-Creation, seeks ways of cost cutting that do not hinder THAI’s quality of service.

To help find such a solution, Thai is encouraging employees to propose ideas and suggestions to management. Customers with bright ideas can send their suggestions to customer@thaiairways.com. A hashtag is #SaveTG

Another plank in the cost cutting platform is Zero Waste Management, starting with food waste. The airline is cooperating with FoodInnoPolis to develop an action plan.

Direct flights to Sendai in the Tohoku region of Japan will be launched in the fourth quarter and heavily marketed. More use will be made of digital marketing to sell ancillary products, such as increased baggage allowance, travel insurance, airport limousine service, car rental and hotels.

A THAI Synergy Strategy will offer the company’s products and services through business alliances. A Group Strategy, to be implemented regionally in the fourth quarter this year, will aim to mesh the route networks of THAI and THAI Smile more closely.

“With these … strategies, we believe THAI will return to its position as one of the top world class airlines, although not as soon as we hoped,” Sumeth said.

Written by Peter Needham