Now Reading
Thai Airways Rows Back On Warning That Airline is at “Crisis Point”, Says it Was a “Misunderstanding”

Thai Airways Rows Back On Warning That Airline is at “Crisis Point”, Says it Was a “Misunderstanding”

Message From Thai Airways Boss That Airline Was at "Crisis Point" and Risked Being Shutdown Was "Misunderstanding"

Thai Airways has dismissed recent news reports that the airline had reached “crisis point” and faced the threat of shuttering if it didn’t start making more money, saying comments made by the airline’s president had been “misinterpreted”.  Last week, comments made by Sumeth Damrongchaitham to senior executives at Thai Airways’ head office in Bangkok sparked fears that the airline really did risk being closed down.

“Today I want staff to be united to overcome the obstacles. Otherwise, the national airline must close down. There is still time for a solution, but there is not much time,” Sumeth was reported as saying by the English language Bangkok Post.

“Thai (Airways) is really in a crisis,” he continued.  “Next year it must do its best. If staff are still unaware and do nothing, they will not have enough time to fight back.”

“Today very little time remains. Today there is no comfort zone. Everyone dies if this ship sinks.”

The airline has been loss-making for a number of years and a five-year turnaround plan which was meant to get the carrier into the black by the end of last year failed to materialize.  Instead, Thai reported a loss of $365 million USD for 2018 – a 453 per cent increase on the loss it made in 2017.

But while those remarks made by Sumeth seem pretty clear cut, the airline now claims they were “misinterpreted” and he was simply trying to educate staffers about the competitive nature of the aviation industry, while also motivating the senior leadership to “take immediate action to cut costs and boost profits”.

Thai Airways A350. Photo Credit: Airbus

In a statement, Thai Airways says Sumeth “clearly emphasised the importance and urgent necessity of overcoming obstacles in conducting airline business”.

“Thai staff were urged to take heed of how heavy airline competition remains in all areas of business, low cost-carrier competition, airfare promotions, and ‘cut-throat’ route competition in certain markets.”

While Thai might describe the competition as “cut-throat”, the airline also says it is “perfectly capable to perform exceptionally amid tough airline competition.”

The Star Alliance carrier has faced a number of challenges in recent years, including the rising popularity of low-cost carriers and stiff competition from other Asian flag carriers, as well as Middle Eastern airlines.  Fluctuating oil prices and currency conversions, along with technical issues haven’t helped the airline in recent years either.

BoardingArea