Thai Airways International (THAI) is looking to spin off some of its business units into subsidiaries to keep the company growing.
Chai Eamsiri, president of THAI, said the company will have the opportunity to upgrade various business units that have the potential to operate their own businesses into subsidiaries.
The strategy would initially be implemented in business divisions in charge of aircraft maintenance and catering.
With an estimated average profit margin of almost 20% a year, those business units have the potential for "good profitability", he said.
This is greater than the main airline industry, which has an annual profit margin of roughly 5–6%, he said.
Furthermore, because the spin-off would display business gains and losses, it will be evident which business unit has a future, he said.
As subsidiaries, they will have to compete with other companies if they want to win contracts from Thai Airways or other organisations, he said.
"We believe our employees in these business units will not object to this idea.
"Should the business units become our subsidiaries, the rewards for the staff will be better because they might make more money than Thai Airways' main airline operations," he said.
Since every business unit has a unique workforce structure, work environment and set of responsibilities, Thai Airways' management team will have less work to oversee various business units, he said, adding this tactic follows the global practice of the airline industry.
The move will also be in line with THAI's plan to launch the U-Tapao aircraft Maintenance, Repair and Overhaul (MRO) centre, said Mr Chai.
Thai Airways has expressed interest in investing in the MRO centre in a 200-rai plot of land in the Eastern Economic Corridor (EEC), which spans parts of Chon Buri, Rayong and Chachoengsao.
The MRO centre is also part of the government's mega projects to develop the aviation city in the EEC.
Mr Chai said that the MRO centre will help strengthen THAI's business competitiveness and support the government's goal to push the U-Thapao International Airport in Rayong as Thailand's third major international airport.
Asked whether THAI will once again operate as a state enterprise, Mr Chai said he had considered all input from creditors, the public sector and society at large on this matter.
However, he said "there has been no suggestion that Thai Airways should become a state enterprise again".
"We have demonstrated for the past four years since entering the rehabilitation plan that the company can proceed, so I don't think it's worth it for us to be a state enterprise once more after being a public corporation.
"We are more agile and have a better business perspective. When there is a change, employees can adapt faster.
"They dare to make decisions. I think we shouldn't go back to being a state enterprise."
He said the airline served about 13.8 million passengers last year, up from 9 million passengers from the previous year.
Its net income was recorded at 165.49 billion baht in 2023, up 57% from 105.21 billion baht in 2022, he said.
Last year's net profit was recorded at 28.12 billion baht, compared to a net loss of 252 million baht in 2022.
By the end of this year, the airline hopes to have finished its restructuring process, and in the second quarter of the next year, it plans to relist on the Stock Exchange of Thailand.
THAI also aims to support the government's strategy to make Bangkok a regional aviation hub.
Over the next 20 years, the region with the fastest growth rate will be Asia-Pacific. THAI will increase its fleet from the current 103 aircraft to 143 aircraft in 2029 to accommodate the growth.
The airline plans to increase the number of long-haul flights, particularly to Europe.
The latest new flight routes launched on July 1 this year are Bangkok-Milan and Bangkok-Oslo. Later this year, THAI will fly to Brussels, making it the 11th city in Europe, Mr Chai said.
Next year, there is a plan to procure an additional 13 aircraft, both wide-body and narrow-body, he said.
"Thai Airways is a popular brand in Asia, Europe, and Australia. We have no doubt that our company will continue to expand," Mr Chai said.
Chai: Employees will not object