THAI devises a recovery plan

BANGKOK, 14 August 2019: Thai Airways International announced Tuesday strategies to turnaround losses incurred in the 2019 second-quarter results.

According to the airline’s financial report filed with the Stock Exchange of Thailand, Friday, the nett loss for the second quarter of 2019 stood at THB6.88 billion.

Revenue fell 10% to THB42.5 billion and expenses dropped by 0.8% to THB49.6 billion.

Accumulated debt has now reached THB100 billion.

The airline blamed the losses on external factors such as the strong baht currency that appreciated by 8% against the US dollar over one year.

Other negative factors hitting the airline’s Q2 performance included the ongoing US-China trade war and a sluggish global economic performance.

In response, the airline has outlined measures to increase revenue for the remainder of the year. 

The airline confirmed losses were made worse by a decline in tourist bookings to Thailand since the beginning of the year a trend the airline blamed mainly on reduced customer purchasing power.

It also attributed losses to delayed engine repairs by the manufacturer, even though the company implemented cost control measures that reduced costs below the previous year.

But cost-cutting failed to counter the impact of negative external factors that impacted on the group earnings causing an increase in net losses in the second quarter of the year, the airline said in a public statement. 

In the statement, the airline’s management said it “has brainstormed ideas to establish guidelines to increase revenue and reduce expenses as quickly as possible.”

THAI president, Sumeth Damrongchaitham, claimed intense competition had impacted on operating results coupled with recurring issues. He confirmed strategies would be implemented to reduce expenditure and increase revenue.

He outlined the following recovery strategies.

SaveTG Co-Creation: A cost-control strategy that encourages THAI staff to propose suggestions and creates an opportunity for passengers to suggest solutions.

Zero Waste Management: A project that helps save and creates a circular economy for both the organisation starting from food waste. THAI is currently cooperating with FoodInnoPolis to develop an action plan.

Strategy to Increase Revenue: Use digital marketing, such as promotions in digital media to serve better the online customer who downloads the Thai Airways mobile application. The App enables them to make reservations, search for flights, and promotions.

The mobile application helps to increase revenue by selling ancillary products, such as increase excess baggage allowance, travel insurance, airport limousine service, car rental and hotels. 

THAI has selected eCommerce vendors who have worked with other airlines and anticipates that the retailing service will be launched this October.

THAI Synergy Strategy: THAI’s products and services can be offered through business alliances.  Currently, a project is underway for THAI to collaborate with Café Amazon to expand business in Thailand and the Asian region.

 TG Group Strategy: THAI and THAI Smile will improve route connectivity to enable seamless services for passengers regionally during the fourth quarter this year.

“THAI will return to its position as one of the world’s top-class airlines although not as soon as we hoped,” said the airline’s president.  “It will depend on the support of passengers who still love THAI. They can help by flying with our airline, use our services, and by making recommendations under the #SaveTG concept. All employees and I are confident that we will accomplish our goal.”