Thai Airways International is prepared to move its Thai Smile Air subsidiary to Don Mueang International Airport and to offer early retirement to 900 staff members as part of a three-year revival plan. The national carrier expects to return to profit by 2017.
Relocating Thai Smile's operation from Suvarnabhumi Airport to Don Mueang is expected to result in more passengers for the subsidiary carrier. THAI will talk with Nok Air about giving some routes to Thai Smile.
The move is also aimed at dealing with the competition from other low-cost carriers, especially AirAsia, which have been stealing a lot of passengers from THAI and Thai Smile.
However, Patee Sarasin, chief executive officer of Nok Air, said relocating Thai Smile Air would damage THAI as it could affect the parent airline's connecting flights. He added that it would be difficult to get approval for this plan.
Another cost-cutting measure planned by the national carrier would offer early retirement to 900 staff members, especially those who are in inactive positions or are undergoing medical treatment.
The airline held a special meeting yesterday to seek additional cost-cutting measures as well as business-recovery plans. It will submit the rehabilitation plan to the Finance Ministry on Monday to be scrutinised by the military's ruling National Council for Peace and Order afterwards.
"By the first quarter of 2015, the airline expects to reduce operating costs by Bt4 billion (S$156 million). In the meantime, the company hopes to increase revenue by between Bt3.5 billion and Bt4 billion," said Air Chief Marshal Siwakiat Jayema, acting president of THAI.
The airline reported a loss of Bt12 billion in 2013 and continued in the red in the first quarter of this year.He added that the airline was considering reducing flight frequencies on routes with low load factors to save money.
Moreover, the company hopes to boost revenue with a new "Beyond Thailand" campaign, which offers special deals for visitors to Thailand flying on to Malaysia, Indonesia, Singapore or Australia.
The airline will also enhance its on-board services, starting with first class, as part of its aim to become a "super premium" carrier. It will also refurbish its lounge at Suvarnabhumi Airport.
Furthermore, the airline has established a "war room" unit to monitor daily situations and customers' movements. THAI passengers will also join 10-per-cent discounts when purchasing products at King Power Duty Free shops.
According to Siwakiat, THAI's board of directors also approved establishing a special team to oversee the rehabilitation plan and business strategies.
Five executives were transferred to run the plan. They are Teerapol Chotichanapibal, executive vice president commercial; Pandit Chanapai, executive vice president for the business unit; Chokchai Panyayong, senior executive vice president for corporate strategy and sustainable development; Danuj Bunnag, senior vice president for corporate ancillary revenue; and Niruj Maneepan, senior vice president for human resources and compliance.
Siwakiat said the airline hoped to see better results by the third quarter of next year. However, results would remain in the red this year and next.