Thai Airways plans to cut 1,401 jobs

Bangkok, July 26

Thai Airways International Pcl plans to cut 1,401 jobs through voluntary retirement this year and suspend its loss-making flights to Los Angeles and Rome as it pushes ahead with a restructuring plan, its president said today.

Thailand’s national carrier aims to reduce operating costs and capacity by 20 per cent under the two-year plan, which also calls for aircraft sales and a reduction in staffing.

The firm is one of several state-controlled companies that the military government has targeted for reform since seizing power in May 2014.

The flight suspension will reduce Thai Air capacity by five per cent, President Charumporn Jotikasthira told Reuters in a telephone interview. The company aims to cut capacity by 15 per cent during the second half of 2015.

“It’s normal that we have to cut costs and adjust flights to suit changing situation,” he said, adding the airline has set a budget of 5.3 billion baht ($151.86 million) for the voluntary retirement scheme.

The number leaving excludes those that will reach retirement age in 2015, he said.

Thai Airways aims to cut operating costs by up to nine billion baht this year, Charumporn said.

From October 25, the carrier will stop flying from Bangkok to Los Angeles and to Rome. The loss-making routes cost the company more than 100 million baht a year, he said

The flight suspension to Los Angeles will close Thai Airways operations in the United States. The firm suspended flights to New York in 2008, also because the route was unprofitable.

But Thailand’s flagship carrier will double the number of flights from Bangkok to London and Bangkok to Frankfurt to twice daily, he said.

To further reduce costs, Thai Airways will cut the frequency of its flights to Kolkata, India, he said. It will also transfer operations of three routes, Hyderabad in India, Changsha in China and Luang Prabang in Laos, to its Thai Smile mid-range unit, the president said.

Charumporn reiterated his expectation that Thai Airways’ operation will break even at the end of this year, although the bottom line would be impacted by rising restructuring costs.

Thai Airways still has 50 routes that are either loss-making or have low returns, the company said in a statement today.