An unwilling recruit

The country’s permanent secretary for finance Rangsan Sriworasart, who heads the search team, announced when the deadline for applicants ended on July 23 that only two people had applied, both from outside the airline.

Rangsan said the deadline has had to be extended because there needs to be at least half a dozen candidates to choose from.

He’s not giving any explanation for the lack of interest but there could be a couple of good reasons. The first is that Thai remains in a woeful financial position, posting ongoing losses as its passenger numbers drop alarmingly.

The second could be a lack of confidence in the prospects for a lengthy stint in the job: the airline has had six presidents and five different chairmen in the past decade.

Then there’s the thought that the new boss may have to wear battle dress as he takes the helm. That may sound humorous but in aviation circles around Bangkok these days there’s a joke going round that the airline’s tagline,

“Smooth as Silk”, should be changed to “Rough as Khaki”.

For good reason. Thai hasn’t had a full-time president since May 2012, when Chokchai Panyayong was made acting president after his predecessor Piyasvasti Amranand was sacked. Chokchai finally admitted defeat in June, returning to his previous post as senior executive vice president in charge of corporate strategy and sustainable development.

And as the country’s military junta, led by General Prayuth Chan-ocha, continues to spread its influence into Thailand’s 56 state-owned companies (including Thai) as part of its attempt to bring reform to the overall state enterprise system and its combined assets of $340 billion, it quickly found a successor to Chokchai. As from July 1 the new president (acting) is Air Chief Marshal Siwakiat Jayema. He should get on well with Air Chief Marshal Prajin Juntong, who is overseeing economic matters for the junta and who, by the way, is now also chairman of Thai.

It doesn’t end there. Word from inside the airline says five executive vice-presidents, all airline men, have been moved aside to be replaced by military officers, four from the air force and one from the army. Thailand’s national carrier has, historically, always been a receptacle for both serving and retired armed forces officers but now, it seems, its militarisation is almost complete.

Whether all this armour can be translated into good commercial operations remains to be seen. Running an airline is a little different from commanding an air force and whoever runs Thai is facing a steep

“Smooth as Silk” should be changed to “Rough as Khaki”.

uphill climb. It lost $368 million last year and another $81 million in the first three months of 2014 as passenger numbers tumbled in the face of increased competition from low-cost competitors in South-East Asia and the country’s own ongoing political turmoil. There has been a dramatic slowdown in visitors to Thailand, evidenced by Thai’s own statistics which show a 20. 5 per cent decrease in passengers year-on-year. The airline’s load factor, over 80 per cent a year ago, is now less than 70 per cent. It hopes to start making a profit from the second quarter of 2015 following a massive restructuring and cuts in overtime payments.

It’s not all bad news. Thai’s low-cost subsidiaries Nok Air and Thai Smile are gathering strength, which should help it fight off the growing impact on its business from other budget operators such as AirAsia, Jetstar and Lion Air. New aircraft are also in the pipeline to beef up its 100-strong fleet. As well as four Boeing 777-300ERs and five Airbus A330-300s on order it has just taken delivery of its first 787-8, with five more to come. Also on order are 15 A350-900s. Together, these will eventually modernise the fleet and bring improved economics.

In the meantime the junta is endeavoring to speed up rehabilitation by slashing expenses and introducing cheaper fares to boost business. Chairman ACM Prajin says the drop in international tourist arrivals to Thailand is worrying because it has not returned to normal even though the political situation has eased and a curfew was lifted in June. A short-term rehabilitation plan aimed at cutting expenses such as operating costs and overtime (this won’t make the unions happy but they will probably have no choice but to accept it) is already in place. That alone is expected to save $123 million over the next six months. At the same time it is hoped revenue can be boosted by $92 million through new marketing campaigns, including special air fare deals.

If only they could find a new president.