THAI plans to cut cost by B10 bln in 2009
Thai Airways International Plc (THAI) has targeted to reduce its costs up to 10 billion baht, excluding fuel cost, within this year as part of its business turnaround plan submitted to Ministry of Transport and Ministry of Finance yesterday.
Pichai Chunhavajira, chairman of THAI’s Turnaround Steering Committee, said the plan to cut this year’s operation costs is among the most urgent strategies in the first phase of the turnaround plan to solve the problems of the national flag carrier, which recorded a net loss of 14.8 billion baht in the fourth quarter of last year and a loss of 21.4 billion baht for the entire year, in addition to the plans to increase revenue and to regain confidence from financial and capital markets.
The second phase of the turnaround plan, Pichai said, will include fleet plan restructuring, business model and cost structure review, corporate organization, human resource and corporate culture development, management information system enhancement and long-term sustainable capital structure establishment.
Pichai, who is also the chief financial officer of Thailand’s oil and gas firm, also forecast that the airline, owned 51.03 percent by the country’s Ministry of Finance should be able to have a net profit of approximately 6-7 billion baht this year in the case that the turnaround plan bears fruit and help THAI to make up to 33 billion baht of earnings before interest, tax, depreciation and amortisation (EBITDA).
In addition, he also disclosed that the financial ailing THAI wanted to discuss with Airbus about delaying the delivery of six A380 superjumbo planes which is scheduled to be start in late 2010.
Late February, the national flag carrier said it may need up to 20 billion baht to support its operations, repay debt, boost liquidity and to pay for the aircraft.
Pichai said the airline will talk with the creditors of its 15 billion baht in debt in a bid to extend the repayment period for another year, expectedly to be completed within the next few months.
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