Thai Airways sacks President, jeopardising revamp

Friday, 25 May 2012 02:42 - - {{hitsCtrl.values.hits}}

Reuters: The board of Thai Airways International Pcl sacked its president because of disagreements over strategy, a move that could derail the flag carrier’s attempts to return to profit and which is being questioned by its labour union.

Piyasvasti Amranand, a former energy minister, became president in October 2009 when the opposition Democrat party was in power. He has shaken up the airline and launched cost-cutting measures, including reductions in the salaries of senior executives. Thai Airways is 51 percent owned by the Finance Ministry.

Chokchai Panyayong, vice president in charge of strategy and business development, has been appointed acting president, the airline’s chairman, Ampon Kittiampon, told reporters on Monday.

“The board has agreed to terminate the president’s contract because he cannot work in unity with the strategy committee,” Ampon said.

Jamsri Sukchotirat, chairwoman of the airline’s labour union, said she would ask the board for an explanation.

“The board has to clarify the decision because he met key performance targets, the airline’s operations have improved and he has no problem working with employees,” Jamsri said.

Attempts to reach Piyasvasti for comment were unsuccessful.

Piyasvasti, 59, told Reuters in an interview on Friday he was confident Thai Airways would achieve its target of a 6 billion baht ($191 million) profit this year. Analysts are less bullish, expecting a net profit in the range of 1.2-3.5 billion baht after a loss of 10.2 billion in 2011.

Thai Airways faces increasing regional competition from bigger rivals like Singapore Airlines and Cathay Pacific Airways and made a January-March net profit of 3.6 billion baht, up almost 500 percent from a year earlier.

That marks a turnaround from a net loss of 5.4 billion baht in the fourth quarter when the airline was hit by severe floods that devastated the Thai economy and took its toll on tourism.

At the midsession break, Thai Air shares were down 0.8 percent, while the main index was 1.37 percent lower.