Thai Airways president Charamporn Jotikasthira has likened the carrier's previous performance to that of a "fat athlete" competing against "Olympic-class" competitors among Middle Eastern and Southeast Asian airlines.
The carrier’s restructuring plan, focusing on boosting revenue, reducing costs, and improving revenue management and customer service, will enable the airline to compete with rivals, Jotikasthira said today at a delivery ceremony in Toulouse for Thai's first of 12 Airbus A350s.
He says the first stage of the plan, dubbed "Stop Bleeding", was completed in 2014. Thai is now in the "Strength Building" phase until the end of this year. The airline will look to achieve sustainable growth from 2017 onward.
Costs have already been cut roughly 10% by stopping the "don'ts", says Jotikasthira. Some of these savings were achieved by the mutually agreed early-retirement of a number of staff.
Jotikasthira stresses the need for the Bangkok-based airline's various departments to benchmark themselves against competitors.
Thai may reduce its cost by 7% this year, and will look to ultimately reduce costs by a fifth, he adds.
Recent results show that the restructuring efforts are having an effect, but the airline is only halfway there, cautions Jotikasthira.
The airline this year cut its second-quarter operating loss to Bt1.8 billion, from Bt4.7 billion in the same period of 2015.
Jotikasthira acknowledges that low fuel prices have contributed to the turnaround, and that the restructuring plan can only be judged a success if the airline posts a profit in the second quarter – traditionally Thai's weakest period – next year.