Thai Airways draws up plan to cut costs, grow revenue amid losses

Thai Airways International (THAI) has announced strategies to step up efforts to reduce expenses and increase revenue as the carrier seeks to stem losses in the second quarter.

A slew of external crises, such as the strong baht, US-China trade war, sluggish global economic and the closure of Pakistani airspace, had affected the airline as tourists numbers declined and customer purchasing power reduced, in addition to delayed engine repairs by the manufacturer, the airline said in a statement.

THAI has come up with a strategic plan to cut costs and increase revenue

Even though THAI implemented cost-control measures that has brought down the total cost than the previous year, the aforementioned external factors caused the airline to incur an increased net loss in the last quarter similar to other airlines amid a competitive marketplace, according to THAI president Sumeth Damrongchaitham.

In response, THAI management has “brainstormed ideas to establish guidelines to increase revenue and reduce expenses quickly”, which are outlined as follows:

  • SaveTG co-creation: A cost-control strategy that allows THAI staff to propose ideas and suggestions to the management team, and grants passengers the opportunity to suggest solutions for the airline at
  • Zero waste management: A project that helps save and creates a circular economy for both the organisation and the nation as a whole, starting from food waste. THAI is currently cooperating with FoodInnoPolis to develop an action plan.
  • In the fourth quarter, a new marketing strategy will be implemented to launch direct flights to Sendai, in the Tohoku region of Japan.
  • Strategy to increase revenue: Regular utilisation of digital marketing, such as online promotions, to better serve online customers through the Thai Airways mobile app. The mobile app helps to increase revenue by selling ancillary products, such as extra baggage allowance, travel insurance, airport limousine service, car rental and hotels, in addition to enhanced language features and an enhanced layout to cater to the younger generation. Customers will also be able to purchase products online through the eCommerce platform which is expected to launch in October.
  • THAI synergy strategy: THAI’s products and services can be offered through business alliances. Currently, THAI is poised to collaborate with Café Amazon to expand business in Thailand and the Asian region.
  • TG group strategy: THAI and THAI Smile will be stronger together with a route network that offers systematic connectivity for passenger convenience, which will be implemented regionally in 4Q2019. THAI Smile is set to become a Star Alliance connecting partner by year-end, which will strengthen the airline network in this region.

THAI also adjusted its work structure with THAI Smile Connectivity to be centralised in order to increase passenger convenience and implement corporate business ethics throughout the organisation as well as strengthen unity, which is part of the whole #SaveTG master plan.

Sumeth said: “With these afore-mentioned strategies, we believe that THAI will return to its position as one of the top world class airlines, although not as soon as we hoped.”

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