Thai Airways has been looking for a new CEO for nearly two years. The previous CEO retired in September 2016 at the age of 60, and since then they’ve had a VP as acting CEO, while the airline tries to find a qualified replacement.
After quite a search the airline has found a new CEO, and he’s an interesting choice. The board has recommended the hiring of 53 year old Sumeth Damrongchaitham. He’s the president of a state-owned Dhanarak Asset Development Co Ltd., and used to be COO of music and entertainment group GMM Grammy PCL, which is the largest entertainment company in Thailand.
Reuters notes that the biggest problem with Thai Airways appointing a new CEO is the lack of independence they’ll have in their role, given that the board is comprised mostly of civil servants and former members of the air force. Like many other state owned airlines, this often presents a conflict of interest for an independent person trying to do what’s in the best interest of the company, especially as it relates to potential layoffs, cutting unprofitable routes, and plane orders.
It’s also surprising that in a search of nearly two years they ended up with someone who has no experience in the airline industry. Obviously a lot of business principles transfer between industries, but the airline industry is a unique beast, as we’ve seen time and again when those without experience in the airline industry take over airlines.
I suspect the board’s selection had more to do with picking someone they’re comfortable with and who they don’t think will be too disruptive, rather than picking someone who can actually turn the airline around.
Thai Airways used to be profitable back in the day, though has been struggling in the past few years. Last year they reported a loss of about 67 million USD. The airline has 82 planes in their fleet (including 11 different plane types), and doesn’t have a single plane on order anymore.
The airline lacks direction, and it doesn’t seem like they have a cohesive route strategy. Thailand has great geography (especially when it comes to connecting Europe and Australia), though for whatever reason I rarely see Thai offering competitive fares in any cabin between Europe and Australia, for example (well, unless you’re redeeming Star Alliance miles). 😉
I’ll be curious to see what the new CEO does. Hopefully he can help put the airline on a path to profitability and give them an actual direction, though even if he wanted to do that, who knows what the board will allow. Like I said, it’s interesting to choose a non-industry person for the role. Then again, Malaysia Airlines appointed a lifelong airline person as CEO in 2015, and he ended up leaving just a year later to go work at Emirates.
If nothing else, I imagine this new CEO will throw some pretty cool parties thanks to his connections in the entertainment industry…