Thai Airways cuts 1,400 jobs as it struggles to become profitable

Despite assurances that further job cuts would be a last-resort measure, Thai Airways International has announced the loss of 1,400 jobs from its original workforce of 25,000, with the possibility that that number could be further reduced to 20,000. This reduction in numbers is described by Thai Airways as “part of a cost-reduction exercise … carried out only after other measures to control and cut costs have failed,” a move which will subsequently see the airline reduce passenger seat numbers by up to 15% by the end of December.
The current reduction in staff numbers is part of Thai Airways attempts to cut operating costs overall by some 20% within the next two years. Cutbacks will likely also see Thai Airways sell or cut leases on some of its older wide-body aircraft, including its old Boeing 747s, having previously indicated it plans to sell off over 20 aircraft this year. It may also investigate offloading non-central assets such as overseas property, offices and ownership shares in hotels. Thai Airways president, Charumporn Jotikasthira, stated that: “It’s normal that we have to cut costs and adjust flights to suit our changing situation.”
Thai Airways is hoping to make THB9 billion (US$260 million) savings in operating costs through changes to both staff numbers and flight schedules. The company is hoping to turn round a $515m loss in 2014 to a profit within two years. This latest announcement comes soon after the decision to cut the airline’s scheduled services to both Rome and Los Angeles (LAX) by October. The cuts to Los Angeles will have an effect on Airways’ Korean services as the 4X-week Boeing 777-200 LAX flights make a stop at Seoul en route.