Former Thai Airways International director Banyong Pongpanich has urged the government to fully divest its shares in the airline, stating that complete privatization is necessary to prevent bureaucratic inefficiency.
The airline’s restructuring succeeded when its state enterprise status ended after the government’s shareholding fell below 50%, Banyong told a recent forum hosted by the Thai Journalists Association, as reported by Bangkok Post.
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An Airbus A320-232 of Thai Airways is seen at the gate of the Hong Kong International Airport in Hong Kong, China, on Sept. 23, 2024. Photo by NurPhoto via AFP |
The Ministry of Finance has lowered its ownership in Thai Airways from 47.9% in December last year to 38.9%.
“In the past, buying a single aircraft required approval from the Ministry of Transport, the National Economic and Social Development Council, and the cabinet – a process that could take up to four years,” Banyong said, adding that these delays and mismatches stemmed from rigid state enterprise rules.
Banyong warned that political appointments to the board –often involving civil servants and politicians lacking business expertise – had weakened the airline’s agility and competitiveness.
“Civil servants do not have the time or skills to run a business. When executives are chosen based on loyalty rather than merit, the organization suffers,” he said.
To move forward, Thai Airways must reduce state control and embrace market discipline, he said, citing the U.K. model where the government holds no airline shares and relies on market oversight.
Thai Airways plans to almost double its fleet from 78 aircraft to 150 by 2033, an effort to bounce back from financial difficulties in recent years which forced it to file for bankruptcy protection in 2020, following major losses between 2017 and 2019, according to The Nation.
The airline then began a challenging recovery by laying off half of its 30,000 staff and selling US$308 million in assets. It also lost the state-owned status.
The airline plans to partner with Bangkok Airways to handle domestic flights.
