Thai Airways Targets 2016 Profit Return
Thai Airways aims to return to profit in 2016 after a restructuring that involves cutting operating costs and capacity by 20 percent this year.
The airline is one of Thailand's major state-controlled firms undergoing reform since the military assumed power in May. The political unrest that brought about a change in government hit tourism, leaving Thai Airways posting six quarters of loss.
Thai Airways plans to sell and decommission 44 aircraft this year, reducing the size of its fleet to 95, Charumporn Jotikasthira told Reuters news agency.
He also said the airline has enough cash flow to run its business and that it planned to sell up to THB15 billion baht (USD$460.83 million) in bonds this year to refinance debt.
"Our 2015 performance will be negative because we have to book huge expenses related to the restructuring," Charumporn said. The expenses are mostly related to employee retirement schemes and aircraft sales, he said.
"Bottom line should be positive in 2016 although we still have some restructuring costs," he said, adding the airline expected a higher profit in 2017.
The military-led government in January approved a two-year restructuring plan for the airline, which includes cutting 5,000 jobs, selling non-core assets and reducing the number of money-losing routes.
The restructuring comes as Thai Airways, 51 percent owned by the Ministry Of Finance, battles rising debt, brought about by high operating costs and aircraft purchases in recent years.
"There's no point parking non-profitable planes. It's time to sell, not buy," said Charumporn, a former head of the Stock Exchange of Thailand, who became president at the airline in December.
The airline will still take delivery of 20 Airbus A350s in 2017 and 2019, bringing the fleet to 115 planes at the end of 2019, he said.
In the meantime, Thai Airways plans to stop flying unprofitable routes from Bangkok such as to Moscow and Madrid, review staff numbers and offer early retirement, Charumporn said, without specifying how many jobs will be lost this year.