ID :
53541
Thu, 04/02/2009 - 21:05
Auther :
Shortlink :
http://m.oananews.org//node/53541
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Cash-strapped THAI Airways maps strategic plan for profit
BANGKOK, April 2 (TNA) - Loss-making national flag carrier Thai Airways International (THAI) announced a two-stage strategic plan aimed at enabling the airline to turn around to profit amid the global economic meltdown, according to Pichai Chunhavajira, chair of the committee managing THAI’s business and financial rehabilitation plan.
THAI announced in February that it lost Bt21.3 billion (US$592 million) in 2008, the company's first annual loss in 43 years, because of high fuel prices, foreign exchange losses due to the weakened baht, and protests that temporarily shut down Bangkok's two airports from November 25 to December 3 last year.
On Thursday Mr. Pichai told a press conference that under the terms of the urgent rehabilitation plan to be implemented now until next year, THAI will boost its revenues through improved sales and more efficient management of its revenue.
The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.
Other measures under the plan include lowering management overhead by 10 per cent from Bt100 billion in 2009 and cutting fees of board meetings by 25 per cent.
Because of the decision to cut expenses, THAI salaries will not be raised and no bonuses will be given, overtime work will be reduced and buying six Airbus A330-300s this year and two more in 2010 will be postponed.
THAI is facing a cash flow problem amounting to Bt35 billion and postponing Bt15 billion in payments will require the airline to borrow only Bt20 billion to boost its liquidity.
The airline believes that with the first rehabilitation plan the company’s performance could turn around with earnings before interest, tax, depreciation and amortisation (EBITDA) of Bt33 billion, profit after taxes of Bt6-7 billion and debts to equity ratio at 1:1.5 or 1:1 from 3:1 currently.
Under the second strategic plan, new aircraft to be acquired will be reduced to 4 or 5 from 10 now, corporate and personnel development, and restructuring the financial system. - (TNA)
THAI announced in February that it lost Bt21.3 billion (US$592 million) in 2008, the company's first annual loss in 43 years, because of high fuel prices, foreign exchange losses due to the weakened baht, and protests that temporarily shut down Bangkok's two airports from November 25 to December 3 last year.
On Thursday Mr. Pichai told a press conference that under the terms of the urgent rehabilitation plan to be implemented now until next year, THAI will boost its revenues through improved sales and more efficient management of its revenue.
The airline plans to increase its ticket sales via its website channels to 5-8 per cent out of total sales within this year from only 3 per cent now, Mr. Pichai said.
Other measures under the plan include lowering management overhead by 10 per cent from Bt100 billion in 2009 and cutting fees of board meetings by 25 per cent.
Because of the decision to cut expenses, THAI salaries will not be raised and no bonuses will be given, overtime work will be reduced and buying six Airbus A330-300s this year and two more in 2010 will be postponed.
THAI is facing a cash flow problem amounting to Bt35 billion and postponing Bt15 billion in payments will require the airline to borrow only Bt20 billion to boost its liquidity.
The airline believes that with the first rehabilitation plan the company’s performance could turn around with earnings before interest, tax, depreciation and amortisation (EBITDA) of Bt33 billion, profit after taxes of Bt6-7 billion and debts to equity ratio at 1:1.5 or 1:1 from 3:1 currently.
Under the second strategic plan, new aircraft to be acquired will be reduced to 4 or 5 from 10 now, corporate and personnel development, and restructuring the financial system. - (TNA)
