Whether you are flying business or economy class, you recognize Thai Airways in service food as of distinctly unique class where Thai cuisine is so blended with the excellent customer service making you a monarch in their flight. The sad thing is Thai Airways is now tottering in bankruptcy courts for working out. What happened to its business strategy?
On 15 June, 2021 the Central Bankruptcy Court finally approved the programme to restructure debt, submitted by more than 90% of creditors and appointed five professionals headed by the sitting CEO, Piyasvasti Amranand, who was in the helm since 2012 to administer it. The talented CEO was named by the court to lead the rehabilitation programme after he relinquishes his duty as CEO.
Despite having the best of passenger & cargo air fleet consisting of long-haul Airbus and Boeing 747, the airline was continually slipping in revenue generation starting from 2012. Even though Amranand did a marvellous job by putting his career reputation on line, to stop the hurtling down of the company, a cumulative 400 Billion Baht (approximately 12.9 Billion US$) has weighed down so much that the train crash was inevitable.
Things were so bad that to avoid facing the big collapse Thai Airways opted for public auction sale of her 747 fleet to garner some cash-flow to primarily cushion off the loss of US$ 4.5 Billion posted for the financials of 2020. This action rattled not only the company but the entire air travel industry of Thailand. Serving more than 80 international destinations in more than 35 countries this is not the fate one expect to fall on a company that prided itself for the best of in-flight service quality since its inception on 1960.
By the crack of the whip, one gets a laundry list of causes for the state of affairs from management & employees. Chief amongst them include mundane items like blaming the government and strong Thai baht as currency to serious concerns of lack of planning & forecasting and the most ubiquitous inefficiency that has set in during the period when the government held majority control. Now that government has siphoned off its holding this blame game cannot hold water any more.
Paradoxically, nobody wants to venture outside the latent causes. Inherent reasons were, although evident have been swept down the carpet. Put it bluntly it was the total failure of business strategy, if any that was formulated & executed.
Except for few marketing gimmicks here and there, no serious action was taken to match the needs of the segmented market in three areas, namely domestic, regional and international. Granted, that Covid-19 is responsible for the temporary downswing over airline bookings, but the big question is revenue is tasking since 2012. Amazingly, after almost ten years of creeping losses Thai Airways has not yet figured out where the business strategy went wrong!
Cheers!
Muthu
Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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