Thai Airways International is planning to cut 1,401 jobs through voluntary retirement in an attempt to cut operating costs by us dollar 257 million during 2015, Reuters reported.
Thai Airways stated that 50 routes are either loss-making or have low returns. Thailand’s flag carrier also scheduled to cut operating costs and capacity by 20% under the two-year restructuration plan, which will include aircraft sales and a reduction in staffing.
Thai Airways is one of several state-controlled companies that the military government has targeted for reform since seizing power in May 2014. Company president Charumporn Jotikasthira said the flight suspension will reduce Thai Air capacity by 5%, The company aims to cut capacity 15% during the second half of 2015.
He added by saying “It’s normal that we have to cut costs and adjust flights to suit a changing situation,” adding the airline has set budget of THB 5.3 billion for the voluntary retirement scheme. The number leaving excludes those that will reach retirement age in 2015.
Thai Airways will stop flying from Bangkok to Los Angeles and to Rome. These loss-making routes cost the airline more than THB100 million per year. The flight suspension to Los Angeles will close the company’s operations in the United States. The firm suspended flights to New York in 2008, for reasons of rentability.
But the carrier will double the number of flights from Bangkok to London and Bangkok to Frankfurt to twice daily.
To further reduce costs, Thai Airways will cut the frequency of its flights to Kolkata, India, he said. It will also transfer operations of three routes, Hyderabad in India, Changsha in China and Luang Prabang in Laos, to its Thai Smile mid-range unit, the president said.
Mr Charumporn reiterated his expectation that Thai Airways’ operation will break even at the end of this year, although the bottom line would be impacted by rising restructuring costs.
