BANGKOK, November 4, 2021: Thai Airways International has recouped THB 44.8 billion mainly through massive labor cuts and aircraft rentals, according to the latest rehabilitation progress report from the airline company.
The Chairman of the Rehabilitation Plan, Piyasvasti Amranand, presented the progress report, stating: “The operational performance of THAI has progressed satisfactorily in many aspects, including cost reduction and organizational restructuring. ”
He noted that THAI had adopted 400 priority projects which reduced operational expenditure by THB 44,800 million, representing 77% of the rehabilitation target.
Massive savings have resulted from a so-called “resizing of people”. THAI reduced its workforce by 29,500 in 2021, with a monthly payroll of 2,600 million THB, to the current level of 14,900 employees, costing 600 million THB per month.
Rehabilitation progress report says staff cuts saved the airline THB 16 billion, followed by fleet restructuring and fuel costs cut by THB 12 billion . Aircraft lease returns and engine negotiations cut costs by an additional THB 11.3 billion.
Lease and hire-purchase agreements for 16 aircraft have ended while 42 “aging and fuel-hungry aircraft are for sale or for disposal. It leaves the airline with 38 operational planes of four types rather than nine. 20 other A320s continue to operate under the low-cost subsidiary Thai Smile, giving the group 58 aircraft.
The downsizing has led the airline to “reorganize the allocation of space at the head office as vacant properties are for sale or rent in Bangkok, Phuket, Chiang Mai and Chiang Rai.” Ultimately, the national airline is out of the real estate market and may even rent floors from its headquarters tower as cost-cutting measures continue.
Commenting on the savings, Piyasvasti concluded: “Since June 2021, the plan administrators have made every effort to manage THAI’s financial liquidity while ensuring that the operations and activities of THAI are carried out in accordance with the rehabilitation plan. and the corporate reform plan, resulting in sufficient cash flow for the business. . “
Other cost-cutting measures negate or reduce employee benefits such as free business or first-class tickets for board members, retired employees and their relatives.
Performance records for October 2021 showed THAI achieved the highest operating revenues since the Covid-19 pandemic in April 2020, reflecting a brighter and better outlook for the aviation industry.
From April 2020 to October 2021, THAI generated revenue of THB 10,000 million through freight and courier services. During the same period, the company’s Aviation division also provided services to 80 airline customers and generated sales of THB 4,800 million.
The operating loss for the first six months of 2021 amounted to THB 3,973 million, down from the previous year. Due to “one-off” income, THAI recorded a net profit of THB 11.121 million, which is THB 39,151 million more than last year.