Thai Airways: Reaching New Heights

Thai airways logoEach year, more than 17 million tourists and members of the international business community descend on the Thai capital of Bangkok, making it one of the most popular destinations in the world alongside the likes of London, New York and Hong Kong.
And with Thailand continuing to consolidate its position as the gateway to the Asean Economic Community as well as remaining one of the world’s best-loved holiday destinations, that popularity looks set to continue well into the foreseeable future.
All of which is good news for the country’s economy, particularly its tourism and aviation sectors. More than 53 million passengers passed through Bangkok’s Suvarnabhumi International Airport last year, an increasing number of them courtesy of Thailand’s flagship carrier, Thai Airways International (THAI).
For many years now, THAI has been a byword for much that is good about the country, particularly its citizens’ reputation for hospitality and the delicate flavors of the national cuisine. It has nevertheless had its struggles in recent years, largely brought on by a combination of the ferocity of competition within the global airline sector and some over-ambitious plans for expansion since the turn of the millennium.
Thai Airways CEO Charamporn JotikasthiraTwo years ago, with financial crisis looming, the authorities began a search for a leader with the vision and commercial acumen required to turn the company around. It did not take them long to find the ideal candidate to fulfill the role in the form of the former president of Thailand’s Stock Exchange, Charamporn Jotikasthira.
With successful careers in both banking and finance already behind him, Jotikasthira immediately set about taking the steps required to put THAI back on course. The airline’s new president has likened the battle for market domination to an Olympic event, in which leanness and fitness are prerequisites for success; two characteristics that THAI appeared to have lost by the time he took up his new role.
Jotikasthira wasted little time putting his new house in order. Having decided that his first priority had to be to stop the airline hemorrhaging money, he had within six months cut out several unprofitable routes, including services to Johannesburg, Madrid, Moscow and Los Angeles; offered 1,800 staff early retirement; and began systematically cutting back costs department by department.
With the painful but necessary cuts under way, Jotikasthira then turned his attention to the steps required to return THAI to its former glory. “We are now in our second year of the restructure,” he says, “and we are taking a more professional approach to both sales and business management. When I arrived, we weren’t selling as aggressively as we should have. We were just lucky that people wanted to come to Thailand.” A new head of sales was subsequently recruited from Australia who helped introduce the best practice to drive the sales organization.
Jotikasthira was also acutely aware that the quality of the service it offers will play just as an important part in the airline’s resurrection as its ability to compete on price, and considerable effort has gone into making the THAI travel experience among the best on the market. “We should be the first choice for anybody wanting to travel to Thailand and beyond,” he says. “The product we have to offer is already among the best, with state-of-the-art seating and excellent service.”
Last month, in a sign that the austerity drive may be coming to an end, the carrier announced that it was planning to add new routes and to accept deliveries of more fuel-efficient aircraft to replace its aging fleet.
Thai Airways crewJotikasthira and his colleagues are also now in the process of drawing up a 10-year plan to secure the carrier’s future growth. As well as providing for considerable extra investment in technology and the quality of the service THAI will be able to promise tomorrow’s passengers. The plan is also to focus on the expansion of its geographical footprint.
While this will probably entail establishing new routes around the region to destinations in China and Australia, Jotikasthira is equally keen to explore the opportunities that its hub at Suvarnabhumi airport has to offer, particularly through the establishment of partnerships with other airlines operating in the region. By his calculations, only 5% of the carrier’s revenues come from partner airlines making use of THAI’s hub in Bangkok, compared to an industry average of around 25%. Even if he can get that figure up to 20%, he estimates that substantial additional revenue can be realized.
“There are a lot of opportunities that we have been neglecting and haven’t even touched on yet,” he says, “but we have made a 180  degree turn and we are now moving in the right direction. We are already the most improved airline in the world and on course towards becoming the best airline in the world.”