Necessary decisions?

Not surprisingly, there are mutterings around the airline’s headquarters that surely there must be a Thai capable of filling the post. Eyebrows are also being raised about the reported salary and benefits being offered the newcomer: basic monthly pay of 650,000 baht a month (A$25,814.11), around triple the level paid to a Thai executive of the same seniority; a monthly travel allowance of nearly $2,800, a housing allowance of nearly $4,000, as well as other fringe benefits. Industry observers, however, say you get what you pay for and Banston is exactly what the struggling, loss-making THAI needs.

With more than 30 years airline experience, he was Qantas’ manager for New Caledonia; Noumea and New Caledonia in the late 1980s, did the same in Tahiti from 1990 to 1993, then was Route Manager the Americas for a year, later taking responsibility for sales, financial control and marketing activities in the Americas, Pacific and Japan regions. After managing Qantas subsidiary Airlink he eventually became manager airline alliances, General Manager Strategy Development and Commercial Manager International Sales. He joined Emirates in 2011 as its national Accounts Manager in Australia and was appointed the gulf carriers’ Vice President Commercial Operations Australasia in September 2013. His sales and operations experience is something sorely needed at THAI, which lost $719 million in the first nine months of last year.

Banston’s arrival is fueling criticism that began last year when Charamporn brought aboard another Australian, former chief executive of Oman Air Wayne Pearce, not in an executive position but as a “commerce and marketing adviser” to the President for six months. His contract was extended for another six months at the end of last year. Pearce was reportedly paid a fee of $420,000 for his advice and will presumably be getting a similar amount for his extended use. Educated at Macquarie University in Sydney, Pearce worked at Qantas for nearly 28 years, was with Etihad Airways as Chief Strategy and Planning Officer from 2007 to 2010, when he left to take charge of Oman Air, a position he held until February 2014.

Charamporn hasn’t exactly endeared himself to his military government masters. They have already publicly expressed disappointment at the airline’s performance. Yet he is pushing through a major rehabilitation plan that has already seen thousands of jobs cut through a voluntary redundancy plan. Routes have also been dropped, including flights to Los Angeles.

In January he also announced some domestic and overseas offices and residences are to be sold off as part of a cost-saving plan. At least nine offices across Thailand will be closed. Staff residences in London, Jakarta, Copenhagen and Singapore are also on the list, which also includes sales offices in Sydney, Rome, Madrid, Hong Kong, Penang and two in Singapore. It expects to receive more than $40 million from the sales.

“Yet he is pushing through a major rehabilitation plan that has already seen thousands of jobs cut.”

Charamporn also disclosed the airline will negotiate with Airbus and Boeing to put off plans to receive at least 14 jets it has on order. It will concentrate on better utilising its present fleet and try to avoid piling up more debt. The new aircraft include 12 Airbus A-350 and two Boeing B787. Two were scheduled for delivery this year, seven next year and five in 2018. All of this follows the closure of offices in Los Angeles, Moscow, Johannesburg and Madrid last year, when it also sold off 13 aircraft.

The THAI President has defended the recruitment of expatriates on high salaries, saying the remunerations are line with international scales. He has been keen to tap foreign airline professionals’ expertise to help reviving the cash-strapped airline which he has committed to turn around this year. He says there are already signs of improvement, with passenger numbers in 2015 rising 3.77 per cent to 18.4 million and load factors rising to 73.3% from 68.9% in 2014.

Charamporn has said he expects THAI to return to profit by the end of this year, an achievement that will, no doubt, get a big helping hand from reduced fuel costs.