BANGKOK -- Thai Airways International is to cut around 10% of its workforce from December after more than 1,900 staff signed up for an immediate early retirement scheme designed to cut costs and preserve cash at the ailing national carrier.
A further 2,700 staff applied to have six months of paid leave, meaning their salaries will be reduced to 20% of usual levels from November to April. When the period ends they will have a choice of continuing to work or applying for another immediate retirement program.
Both programs were offered from Oct. 19 to Oct. 28. Some 320 crew members applied to both. The airline's management will decide which they will be eligible for.
Thai Airways International was admitted to rehabilitation supervised by Thailand's Central Bankruptcy Court in September. The airline was already in financial trouble -- blamed on its unprofessional management involving ex-Royal Thai Air Force officers, strident unions and an inefficiently employed fleet -- before the novel coronavirus pandemic dealt a further blow.
The company's shareholders' equity turned negative at minus 18.1 billion baht ($580 million) as of June. While its total liabilities ballooned to 332.1 billion baht, a 36.7% increase from the end of 2019, its cash and cash equivalents fell by 35.5% to 13.9 billion baht.
Some 80% of its staff had already accepted either taking a voluntary salary cut or unpaid leave, but Thai Airways' acting president Chansin Treenuchagron revealed this month that these cooperative measures would only enable the company to last until December. The workforce adjustment programs are expected to help the company survive over the year's end.
These programs are among a series of efforts by the cash-strapped airline to generate income while its flights have been severely curbed.
About a month ago, Chansin introduced a plan to franchise its patong-go, or deep-fried dough sticks, sold at the airline's food outlets. He insisted that the airline and its partners could benefit from the snack, which draws long queues each morning. Each box with three sticks and a dip made from sweet potato and egg custard is sold at 50 baht. The sweets make about 10 million baht monthly.
Thai Airways also opened a pop-up airplane-themed restaurant in September and has been offering in-flight meals for delivery since April.
From Sept. 26 the national flag carrier also decided to open its flight simulators to the public. It charges 12,000 baht for 30-minute basic package, 24,000 baht for 60-minute deluxe package, and 36,000 for 90-minute ultimate package. The offers are marketed to aircraft enthusiasts and unemployed pilots wanting to maintain their skills.
Amid the efforts to save cash, however, workers' unions issued a letter on Oct. 8 asking Thai Airways to reconsider the promotion of more than 60 executives, including Ponguma Didyasarin, wife of the airline's chairman, Air Chief Marshall Chaiyapruk Didyasarin.
The union saw no need to rush the promotion, while Chansin insisted retired executives needed to be replaced and said the promoted executives were endorsed by a high-level seven-person committee. The promotions will lead to higher labor costs and eventually higher severance payment.
Thai Airways' rehabilitation process is ongoing. The latest deadline is on Nov. 2, when its creditors must file their application for debt repayment.