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Thair Airways board ready to move forward with 5-year Strategic Plan

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Thai Airways International Public Company Limited’s (THAI) board of directors and management led by Mr. Ampon Kittiampon, THAI chairman of the board of directors, and Mr.

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Thai Airways International Public Company Limited’s (THAI) board of directors and management led by Mr. Ampon Kittiampon, THAI chairman of the board of directors, and Mr. Piyasvasti Amranand, THAI president, held a workshop on November 28, 2009 to formulate plans to re-establish THAI as a top three airline in Asia and among the five best airlines in the world within two years.

Mr. Piyasvasti Amranand, THAI president, said that the company’s management presented a 5-Year Strategic Plan (2010-2014) and the annual budget (2010-2011) to the board of directors for which both the board of directors and the management undertook a joint review of the 5-Year Strategic Plan. The board of directors agreed in principle to the Strategic Plan, but also made some observations for improvement before submitting the 5-Year Strategic Plan for final board approval on December 18, 2009. Upon approval of the Strategic Plan, implementation will commence immediately on its 50th Anniversary (2010) to achieve its goal of TG 100 where THAI will remain a strong and viable airline in its centennial anniversary.

The Strategic Plan emphasizes 3 dimensions: the need to be highly-customer oriented, create higher value for customers, and ensuring dynamism. The Strategic Transformation Roadmap to propel the Strategic Plan includes: (1) Strategic Positioning, (2) Building Customer Value, (3) Route Network and Strategy Development, (4) Product Strategy, (5) Pricing, Revenue Management, and Distribution Channels, (6) Business Strategy for THAI Business Units, (7) Cost Efficiency and Productivity, (8) Organizational Effectiveness, and (9) Financial Strength.

Focus is placed on achieving the highest level of customer satisfaction within 2 years with the plan to refurbish seats and entertainment systems within existing aircraft along with providing improved customer experience at every touchpoint from ticketing, ground services, and inflight services, until the customer leaves the airport.

To achieve the above goal, the company’s board of directors approved the refurbishment of 12 Boeing 747 aircraft that are utilized primarily on flights to Europe that are high revenue-making routes. Refurbishment will take two years for completion for all 12 aircraft. In the meantime, other service enhancement strategies will need to be immediately put in place, such as improvement to inflight menus, ensuring service standard and consistency at all customer touchpoints.

For 2010, the established targets include achieving revenues of 193,000 million THB, a 20.7 percent increase over 2009. Profit before interest, tax and foreign currency exchange (EBIT) gain/loss is expected to be approximately 4,300 million THB, and EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) is targeted at approximately 32,000 million THB. Available seat kilometer (ASK) is set for a 10.7 percent increase to 80,000 million for production, revenue passenger kilometer (RPK) is set at 59,000 million, a 13.2 percent increase over 2009. Target average cabin factor for 2010 is 74 percent along with a 11.4 percent increase in freight production (ADTK) and a 14 percent increase in freight revenue over 2009 to 4,400 million ton kilometers (ADTK) and 2,200 million ton kilometers (RFTK), respectively.

Changes will be implemented in 2010 and beyond to strengthen its internal operations and enhancing its competitiveness in 2011. For 2012 and beyond, the solid operating and financial base will enable THAI to again grow and expand with sustainability towards achieving TG 100.

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Editor in chief is Linda Hohnholz.