“Thai Airways” prepared to restructure as a wholly private organization
Thai Airways announced the restructuring of the organization, its welfare, and the new employment numbers, while SET posted the NC sign and restricted the trade of THAI stock from March 8, 2021.
Thai Airways International Public Company Limited revealed that today (March 9, 2021), the management is preparing to announce the organizational restructure, new benefits, and welfare plan before allowing employees to sign a new employment contract, so-called employment transformation. Also, it is still in the restructuring process, so it is necessary to reform the organization.
The transformation will occur in a priority manner. First of all, it regards employee’s benefits and welfare, including employee numbers following the new restructuring plan. Merging or separating departments can be possible, which certainly affects the number of existing employees.
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“When the new structure was announced. Employees will have plenty of time to decide whether to stay or to sacrifice themselves so that their subordinates can stay. If departments require to reduce staff or if the staffs have multiple skills, they may require to re-apply in a new department. The reduction target is from the existing 19 thousand employees to 13 or 15 thousand. It can be categorized in percentage as follows; outsource employee for 20.93%, level 1-7 employees for 42.83%, pilots and crew for 28.72%, level 8-10 employees for 7.3%, level 11-12 employee or management Executives for 0.17%, level 12-13 employee or Executive Vice President for 0.04% and President level for 0.01%”, Thai Airways added.
Mr. Chansin Treenuchagron, Acting President (DD) of Thai Airways, previously claimed that “Thai Airways also plans to downsize its fleet and downgrade from 12 to 5 aircraft types as well as downgrading from 9 to 4 engine types to be in line with the aviation industry. This will enable Thai Airways to reduce costs by up to 30-50% and return to profit in 2024”. However, on March 7, 2021, the management announced a new salary structure using the same criteria for all levels, instead of the previous structure where; 1. employees who joined before 2005, the company will be responsible for the tax; and 2. employees who joined the work after January 2005 onwards must be responsible for their own tax. The previous structure is attributed to inequality and difficulty to manage.
Nevertheless, there is still a sound objection from the Thai Airways International Union regarding the adjustment of an organizational structure of Thai Airways that “the union maintained its opposition to the requirement for all employees to resign and then sign a new employment contract because it was seen to be forcing employees with no other choices. The union has filed the objection to the Ministry of Labor, and on March 9, 2021, the Labor Dispute Mediator at the Ministry of Labor schedules the meeting with the union representative and expects to have a representative of the management as well”. While yesterday (March 8, 2021), the Stock Exchange of Thailand (SET) notified regarding Thai Airways International (THAI) having a negative equity value after the listed company has submitted the financial statements for the year 2020, which show that the equity value is less than zero, resulting in the company is subject to possible delisting according to SET’s regulation.
Therefore, SET posted NC (Non-compliance) sign and still posted SP (Suspension) sign to suspend THAI stock trading. Also, Thai Airways need to declare that apart from filing a petition to the court to propose a rehabilitation plan under the bankruptcy law, THAI makes other decision to engage in any other actions or not. Thai Airways must set the time to implement the chosen method for restructuring or any other options (if any) and disseminated it to shareholders and investors within April 7, 2021. However, from March 8, 2021, the periods of action will be divided into 3 periods, each period lasting for 1 year (NC – phase 1, NC – phase 2, and NC – phase 3). When the period expires, if the company is still unable to eliminate the grounds for delisting, SET will propose to the SET Board of Governors to consider delisting the company’s securities accordingly. Stay tuned for more news and updates at www.thac.or.th.