Monday, July 7, 2008

Thai Airways being torn apart from within


Board and union must work to restore dignity and professionalism to the national carrier

Although the board of directors at Thai Airways International (THAI) decided to reinstate Apinan Sumanaseni as president last week, the national carrier's internal problems are still far from being resolved. Executives and staff members have been divided largely because of internal conflicts that have arisen from criticism of the board's major decisions.

For instance, THAI will stop direct flights between Bangkok and New York because the national carrier can no longer afford to offer its passengers lower prices than those on offer by neighbouring airlines, such as Singapore Air, which offers only business seating for its direct flights to New York. Many critics have questioned the huge expense involved in starting the Bangkok-New York direct route to begin with.

Moreover, staff and union members have challenged the THAI executives' decision to acquire eight Airbus A330-300 aircraft, at a total cost of Bt30 billion. Opponents of the plan said the acquisition would place a higher burden on THAI's operation costs. In fact, THAI executives had earlier decided to expand the aircraft fleet through operating lease contracts, which should have saved costs. But the Samak government decided instead to purchase the eight aircraft earlier this year. The union cited this decision as one of the wrong ones the board had made

The union made the solid argument that, considering the sluggish aviation industry, this purchase of new aircraft was ill-timed, especially when the original decision to acquire the aircraft through operating lease contracts would have eased the airline's financial burdens.

THAI staff and executives are divided into two groups: those who support Apinan and those who support executive vice president Norahat Phloiyai, who briefly replaced Apinan as president. The movement against Apinan started some time ago, however, Norahat was not seen as a perfect choice due to his close connections with former prime minister Thaksin Shinawatra.

The decision for the board to remove and abruptly reinstate Apinan is simply the tip of the iceberg. The protest reflects the union's anger towards what they say has been the mismanagement of THAI. And the union does not trust the board. They see hidden motivations behind certain decisions.

The feeling of mistrust inside the organisation has links to the disruption in the selection of a president for the carrier. Apinan was removed but reinstated. Norahat for a brief period - about six hours - replaced Apinan. Local newspapers described the THAI board of directors as uncharacteristically immature for a national flag carrier.

The underlying issue of the conflict at THAI is the staff's concerns that the airline's operations are not based purely on professional considerations. There is the belief that if THAI's operations are motivated by political influence, then the national carrier's ability to compete with other airlines in the region would be adversely affected.

Besides, the national carrier cannot accept anything less than real professional management, especially now that the higher price of oil has certainly compounded the difficult situation for airlines and forced them to survive amidst tough competition in the aviation industry.

The board and the management need to sort out their internal disputes and make the right decisions for the airline without compromising their professional integrity. The incident last week has already tarnished the image of THAI on the international scene. The national flag carrier deserves better than that.

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