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18 April 2014
Read in Minutes


Banyong backs THAI privatisation

Amornrat Mahitthirook

Ailing airline faces ‘critical’ debt levels

A former member of the Thai Airways International Plc (THAI) board has backed the blanket privatisation of the financially ailing national flag carrier.

Banyong Pongpanich, chief executive officer of Phatra Security Plc and former THAI board member, said THAI has an operating fund of 56 billion baht, but an accumulated debt of 250 billion baht.

The airline would face critical debt in the next six months if nothing is done to solve the problem, he warned.

He supported the blanket privatisation of the national flag carrier as THAI was the only Thai state enterprise that was facing fierce competition, and had not received any financial support from the government.

“It has been proven that state enterprises cannot compete with the private sector. There are examples from several airlines. After undergoing privatisation British Airways was able to fully recover,” Mr Banyong said during a seminar on how to help the airline overcome financial crisis.

The former THAI board member said a lack of experts sitting on the boards of state enterprises in the country was a major problem, as half of board members were government officials and the other half were appointed by politicians.

Interference by the board in the management or transfer of officials was also another problem faced by several state enterprises.

In Singapore, executives of state enterprise boards were not Singaporean nationals. Renowned and capable people with achievement records were selected to sit on the boards of state enterprises in that country, he said. High salaries were given to those executives, as they had to make their agencies compete with others.

Mr Banyong said it was crucial to improve the management of the national flag carrier. Interference in the appointment of board members would only weaken the airline, he said.

He pointed to the State Railway of Thailand (SRT), which was a popular workplace for capable engineers some 50 years ago. After that, the SRT became less popular due to management problems.

He said human capital was crucial for the national flag carrier. The airline has employed many personnel, but several positions do not have enough staff.

Duenden Nikomborirak, research director of the Thailand Development Research Institute (TDRI), said there were no government officials to sit on the Singapore Airline board. Instead, Singapore Airlines had six overseas airline professionals serving as executives. This differed from the THAI board whose members were appointed by politicians and did not have skills to offer the airline, she said.

Factors affecting THAI’s competitiveness with other airlines included limitations by state regulations, a lack of swift decision-making and political interference, she pointed out.

Lae Dilokwitthayarat, an economics lecturer at Chulalongkorn University, said THAI’s labour union was important as part of its job was to scrutinise transparency in procurement projects at the airline.

The airline’s labour union must be strengthened to help it prevent politicians interfering in the affairs of the state enterprise, he said.


First published: Bangkok Post,  April 18, 2014