Transport Airlines

Political Meddling Is Killing Thai Airways, Experts Say

Apr 19, 2014 6:00 am

Skift Take

There’s a difference between an airline that’s seen as a source of national pride that must be defended, and one that’s seen as an accountability free piggybank for political cronies.

— Jason Clampet

Free Report: The Changing Business of Extended-Stay Hotels

Athit Perawongmetha  / Reuters

This typifies Thai Airways: After a Thai Airways plane skidded off the runaway while landing at Bangkok's Suvarnabhumi Airport, officials covered up the branding to try to avoid bad press. It didn't work. Athit Perawongmetha / Reuters


Thai Airways International Plc, the national carrier, should be privatised and also look for ways to get qualified members on its board of directors if the airline wants to stay competitive in the aviation industry, according to specialists from finance, academics and the Thailand Development Research Institute (TDRI).

They agreed that the 54-year-old airline has faced significant trouble in internal management and financial performance of late. Citing rampant political interference, the carrier has been losing its competitiveness in the market and operational reform has become a must, they said.

Banyong Pongpanich, chairman of Phatra Securities Plc and previously a member of the board of directors of THAI, said the airline should be privatised immediately to keep it alive and thriving in the industry.

Using ailing Qantas Airways as an example, he said the Australian carrier allowed investors to hold more stakes in the company in order to reduce its status as a state enterprise, and also as a source for new funding.

Based on his idea, a 51 per cent stake held by the finance ministry in THAI should be replaced by Thai investors.

No longer would the airline be state enterprise, thereby not allowing politicians to cash in on the operation, making it similar to British Airways.

Being a state enterprise also poses trouble within the operation, he said. Clearly, the board members who sit in THAI are from state agencies. Despite the quota of competent members on the board, it is being exploited by politicians who choose their own people to sit in.

In addition, the operation has followed the regulations of a state enterprise, which has produced barriers in operation with time-consuming processes in decision-making on urgent issues. More seriously, it is a loophole to let politicians in to interfere with the management team.

Duenden Nikomborirak, TDRI’s research director, said there was nothing bad about being a state enterprise. Looking at Singapore, more than half of the companies exist as state enterprises in the island nation, she said.

However, they are successful in running their businesses, and, one can count Singapore Airlines among those firms.

According to Nikomborirak, there are no state servants sitting on the company’s board. Instead, it is run by professionals from different fields such as finance, law, marketing, trading and transportation.

She said this reflected that there was no clear system in selecting qualified board members at THAI.

The current procedure has proved itself no longer workable, she added, as it can allow politicians to cash in and allow the finance minister to take charge for approval.

“The person who manages [THAI] profitably cannot stay, but the person [who] failed the company can stay,” she said, adding that transparency in the operation could also be improved.

She urged that it should have a viable checking system to keep balance in the operation.

They specialists spoke yesterday at a seminar on “Breaking Thai Airways International Crisis for Development and Sustainability,” held by Thai Airways International Union.

Tags: , ,

Next Up

More on Skift

Courtyard by Marriott Lures Millennials with Wine, Dance and … Dogsleds?
Marriott Uses its Own Staff to Recruit Employees in New Campaign
National Parks’ Centennial Campaign Expected to Boost Outdoor Recreation
Free Webinar: How To Effectively Personalize Marketing Across Travel Sectors