Prayut ‘dissatisfied’ with THAI chief’s performance
Prime Minister Prayut Chan-o-cha is “dissatisfied” with the first-year performance of Charamporn Jotikasthira, president of loss-making Thai Airways International Plc (THAI) as the national carrier braces for record losses this year, senior government sources said yesterday.
Mr Charamporn, a 58-year-old veteran banker and computer scientist, will be given another six months to turn the 55-year-old airline’s fortunes around or face the axe, a cabinet source said.
“Currently the prime minister is dissatisfied with Mr Charamporn,” said the policy-making source, who declined to be identified.
“He may survive this year’s evaluation and be given another six months to prove himself. If he continues to miss targets, he won’t survive the next evaluation round.”
After a rosy five-year record as president of the Stock Exchange of Thailand, Mr Charamporn was appointed THAI chief last December promising a “big change”.
He pledged to make the state-owned airline “undergo an urgent transformation” over three reorganisational stages, focused on preventing further losses, strengthening the firm’s competitive business advantage, and building longterm sustainable growth.
“The plan for the debt-ridden airline includes revenue generation, rigorous financial discipline, customer service improvement and human resource development,” Mr Charamporn said in the airline’s 2014 annual report.
But the company last week posted 18.1 billion baht in losses for the first nine months, up a sharp 97.2% on the same period last year, raising the likelihood the flag carrier’s losses this year could equal or exceed the all-time high of 21.3 billion baht in losses posted in 2008.
The massive loss has forced the company’s top eight executives to accept salary cuts of up to 10% in months that the company suffers losses in the future.
High salaries and other perks for top management at THAI were among the points of concern that Mr Charampon has failed to rein in, Transport Ministry officials said yesterday.
His decision to hire a foreign aviation expert as a personal consultant for six months, paying him 10.5 million baht, as well as hire a consultancy firm to restructure the airline, also upset the board and some cabinet ministers, the sources said.
Mr Charamporn did not answer requests for comment by the Bangkok Post yesterday.
Speaking after a THAI board meeting last week, Mr Charamporn said the airline registered 9.89 billion baht in losses in the third quarter of this year — 4.23 billion baht of which stemmed from aviation business operations and 4.63 billion baht from exchange rate fluctuations and damages to assets and aircraft.
Meanwhile, former THAI president Piyasvasti Amranand has denied accusations the airline’s losses in 2015 were partly caused by fuel-hedging decisions he had made during his October 2009-June 2012 term.
The airline reported a net profit of 6.23 billion baht in 2012, net losses of 12.05 billion baht in 2013 and 15.61 billion baht in 2014.
During a speech to lawmakers and policy-makers last month, Gen Prayut vowed to tackle inefficiency at loss-making and debt-ridden state enterprises, telling their executives to consider cutting their salaries as a means of reducing losses, particularly at Thai Airways.
“I will overhaul them. Each organisation hires a large number of people, but when they introduced early retirement incentive programmes to cut costs, only low-level staff left, not high-level executives,” Gen Prayut said.
THAI said last week that staff cuts, outlined in its “Mutual Separation Plan”, saved the company 3.722 billion baht in the first nine months of this year.