Thai Airways International will cut its workforce by 1,400 by the end of the year. Despite pledging earlier this year that job cuts would be a last resort, the 25,000-strong workforce could be cut to as low as 20,000, Thai Airways president Charumporn Jotikasthira said.
The cuts, described by Thai as “part of a cost-reduction exercise ... carried out only after other measures to control and cut costs have failed,” will see the carrier reduce overall passenger seat numbers 15% by end-December.
The announcement comes on the heels of the decision to cut Thai's scheduled services to both Rome and Los Angeles (LAX) by October as part of route rationalization, Charumporn said. The LAX cuts will also affect the carrier's Korean services because the 4X-week Boeing 777-200 LAX flights make a stop in Seoul.
The staff reductions come as part of a drive to cut overall operating costs 20% within two years, which will also likely see the carrier sell or cut leases on some of its older widebodies, including its ageing Boeing 747s.
The carrier has previously said it plans to sell off more than 20 aircraft this year, and could also look at divesting non-core assets such as overseas property, offices and ownership shares in hotels. “It's normal that we have to cut costs and adjust flights to suit our changing situation,” Charumporn said.
Thai says it is targeting some THB9 billion ($260 million) savings in operating costs through the schedule and staff cuts, and plans to turnaround from a 2014 $515 million loss to a profit within two years.
The carrier is also under the threat of Thailand facing regulatory blacklisting, brought on by the recent inspection reports from both ICAO and FAA. Both organizations flagged Thai aviation operational and safety standards as needing better oversight.
(Jeremy Torr - ATWOnline News)