Thai next?
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Thai next?
Report from the BBC(16/11):
"Thai Airways International is struggling under $2bn of debt and may eventually collapse, its chairman has said.
According to the Bangkok Post newspaper, the firm's chairman, Virabongsa Ramangkura, said massive restructuring was needed if Thailand's national airline was to survive.
"If we continue managing the way we have, I can guarantee that in no more than three years, the company will collapse," Mr Virabongsa reportedly told a staff meeting.
He said Thai Airways' debt was 18 times the size of its equity, and the firm's ability to repay what it owed was made tricky by unfavourable exchange rates and volatile oil prices.
The newspaper said the Thai government, which owns 93% of Thai Airways, would offer standby credits to shore up the company's financial position.
In the meantime, Mr Virabongsa hinted that staff reductions could be made: Thai Airways, with a staff of 25,000, looks heavily overstaffed in comparison with its peers.
Singapore Airlines, for example, has a workforce of 14,000.
Mr Virabongsa said the only option was to stop taking on new staff.
Overtime is to be radically reviewed and fewer aircrews deployed on flights - but not to the extent that it would compromise passenger safety.
Cost-saving measures are also planned, including slashing donations to charitable projects, and cutting public relations and office expenses.
Thai Airways has had a terrible year. In September, its entire board of directors resigned amid bomb threats and rows over management, just as the airline was preparing for part-privatisation.
The resignations followed demands for change in the company's management by Prime Minister Thaksin Shinawatra, who had become highly critical of the airline.
Mr Thaksin used the word "huay" to describe the airline - a derogatory term that can be translated as "it sucks". "
"Thai Airways International is struggling under $2bn of debt and may eventually collapse, its chairman has said.
According to the Bangkok Post newspaper, the firm's chairman, Virabongsa Ramangkura, said massive restructuring was needed if Thailand's national airline was to survive.
"If we continue managing the way we have, I can guarantee that in no more than three years, the company will collapse," Mr Virabongsa reportedly told a staff meeting.
He said Thai Airways' debt was 18 times the size of its equity, and the firm's ability to repay what it owed was made tricky by unfavourable exchange rates and volatile oil prices.
The newspaper said the Thai government, which owns 93% of Thai Airways, would offer standby credits to shore up the company's financial position.
In the meantime, Mr Virabongsa hinted that staff reductions could be made: Thai Airways, with a staff of 25,000, looks heavily overstaffed in comparison with its peers.
Singapore Airlines, for example, has a workforce of 14,000.
Mr Virabongsa said the only option was to stop taking on new staff.
Overtime is to be radically reviewed and fewer aircrews deployed on flights - but not to the extent that it would compromise passenger safety.
Cost-saving measures are also planned, including slashing donations to charitable projects, and cutting public relations and office expenses.
Thai Airways has had a terrible year. In September, its entire board of directors resigned amid bomb threats and rows over management, just as the airline was preparing for part-privatisation.
The resignations followed demands for change in the company's management by Prime Minister Thaksin Shinawatra, who had become highly critical of the airline.
Mr Thaksin used the word "huay" to describe the airline - a derogatory term that can be translated as "it sucks". "
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Sad, but true. They better shape up before it's too late. Privatisation of the company is a joke, without the government aid, and the sales of aircrafts in the past, THAI would have been gone a long time ago. The silk isn't smooth anymore. 
