THAI board chairman, Amphon Kittiamphon, told the press at the close of the meeting, yesterday afternoon, that the board agreed to terminate the contract with just one month’s notice and six-months salary compensation of Bt5.4 million. (Bt900,000 a month).
Critics claim the decision is political, although the chairman denied that charge claiming it was due to poor communications between the board and president.
The board claimed discord in communications between board and president could stymie vital strategies and damage the airline’s chances of reaching a Bt7 billion profit at the end of the year as promised to shareholders.
Denying there was political pressure the chairman claimed seven of the 12 board members were appointed by the Abhisit administration.
During a press conference, at the close of the board meeting, Mr Piyasvasti said the board’s reason for termination was ambiguous and the board had to make it clear, warning if it discredited him he would sue the airline.
“This company is a state enterprise, belongs to Thai people and is a listed company, not a company run by a few people,” he said. “The operational results have improved. Everything is getting better. Politics might be a reason. But the board’s reason is too ambiguous.
“According to the contract, the board can terminate, but if this discredits me, I am forced to sue. I would like the board to clearly identify the reason.”
Until a new president is appointed, the airline’s executive vice president, strategy and business development, Chokchai Panyayong, takes on the role of acting president. It gives him full authority to run the airline short transferring management posts.
Mr Piyasvasti was appointed a THAI president in June 2009 and officially took office in October.
Under his management, net profit for the 2010 calendar year reached Bt15.4 billion, a 111% increase in year-on-year profits over 2009’s Bt7.34 billion profit.
In 2011, the company posted a net loss of Bt10.2 billion though revenue increased over 2011. The net loss was mainly due to higher fuel costs, foreign exchange and the sharp fall in travel demand as a result of floods in Bangkok during Q4.
This year, THAI achieved a net profit of Bt3.64 billion during January to March. In April, the carrier carried 14.2% more passengers more than the same month last year and achieved a cabin factor up from 71.8% to 78.3%.
The president has an uncharacteristic supporter in the form of the airline’s labour union. Its president, Jamsri Sukchotrat, said the union believed the termination was unfair and politically-motivated because Mr Piyasvasti has been working honestly and had passed the performance assessment.
It will submit a letters to the Ministry of Transport, the Ministry of Finance and the Office of the Ombudsman to pressure the board to state the real reason behind the termination.
However, during his time at THAI, Mr Piyasvasti tightened the belt seriously cutting costs and benefits of employees. There are employers who could be relieved by the board’s decision. Rank-and-file staff, who faced job cuts, believed cost cutting should have started with a salary shave at top management level rather than at lower levels of the work force.