Thai Airways reducing staff and ending flights to the US

Since seizing power back in 2014 the Thai military government has been looking to make financial cutbacks and reform state-run organizations. As a consequence the country’s flag carrying airline, Thai Airways, is undergoing a number of changes with the aim of reducing running costs and capacity by 20% over the next two years. One of the measures will see 1,401 jobs go through voluntary retirement this year alone, a figure which does not include those who will also be reaching the age of retirement. The airline has set a budget saving of THB5.3 billion (USD$151.9million) for the voluntary retirement scheme.
The airline will also cease flying its unprofitable route to Los Angeles in October which, after the termination of similarly unprofitable flights to New York in 2008, will see an end to all flights to the US. Combined with ending of flights to Rome from Bangkok, the airline hopes to save THB100 million ($US2.9million) annually. However on the up side, the carrier will be doubling its flights to twice daily from Bangkok to London and Frankfurt.
Thai Airways is hoping to cut capacity by 15 percent for the second half of 2015 and the suspension of these loss-making flights will reduce capacity by 5% according to the airway’s President, Charumporn Jotikasthira, who also said that “It’s normal that we have to cut costs and adjust flights to suit changing situation,” adding that Thai Airways is aiming to reduce operating costs by up to THB9 billion (US$261million) this year.
The airline currently has fifty low-return or loss-making routes, but transferring three routes, Hyderabad in India, Changsha in China and Luang Prabang in Laos, to its Thai Smile mid-range unit may well help the carrier meet expectations of breaking even at the end of the year, though there would then be additional restructuring costs to take into account.