Website thaipbsworld.com is reporting that the Thai Airways International president Sumeth Damronchaitham has admitted that the national flag carrier is in deep financial crisis and may have to fold.
He also said that there may still be time, albeit not much, to save the company “otherwise speculation that THAI is going bankrupt will materialise and there is a chance that we will reach that point.”
In his speech to THAI executives during a training course at the company’s head office today (Tuesday), Mr. Sumeth said there is fierce competition from low-cost airlines on the northern domestic routes, which used to generate one-third of the airline’s revenue, while the European routes have been affected by the strong baht.
He added that the airline is facing disruption to operations from cut-throat competition in the aviation industry, the closing of air space by some countries, high fuel costs and the grounding of planes while they undergo major maintenance.
Mr. Sumeth disclosed that the airline ran up about six billion baht in losses in the first half of this year, expected to increase to 10 billion baht by year’s end.
Accumulated losses for the past five years amount to 36 billion baht.
Meanwhile the Thai Baht continues to strengthen, making tourism to Thai more expensive from many countries. The baht's strengthening value could breach the band of 30 per US dollar, mainly because of Thailand's huge current account surplus.