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Airline board paid price for internal conflict

September 7, 2001

 

An hour before his removal as chairman of Thai Airways International Plc, yesterday Chaianan Samudavanija was still showing his determination to continue the fight to turn the troubled airline around. Never before in its 33year history has THAI suffered so much damage to its reputation, brought by and large from its internal management conflicts.

If he could have stayed on for another two years, he hoped to make the airline better off, in both corporate governance and in professionalism. THAI’s situation was grave. It recently received two bomb threats believed to have come from its own employees, the airline’s president, Bhisit Kuslayanon, was under political pressure to resign and Pracha Maleenont, the deputy transport and communication minister, had been exercising his political power to force changes to the airline.

After talking to The Nation’s senior editors, Chaianan left for lunch. Then he was supposed to attend an extraordinary board meeting, scheduled for 13.00. An hour later the entire THAI board were purged and its president removed in one of the most dramatic shakeups in the airline’s history.

Earlier in the day, news began to filter out that the airline’s management would be facing judgement day. Prime Minister Thaksin Shinawatra hinted briefly that there would be a management change at THAI. He did not elaborate. But he had already sealed the fate of the airline’s management. For on Tuesday, he uttered a Thai phrase that he would slit the throats of both the “monkey and the cock” at THAI.

Thaksin was forced to intervene in THAI after an initial reluctance to take action. That delay cost the airline dearly. Apart from an internal conflict between pilots and groundstaff unions, which delayed a TG flight to Singapore two weeks ago, the airline has been in suicidal mode, with factional politics being played out to the extreme.

On Monday, a TG flight to Rome and Madrid was subject to a bomb hoax, delaying the flight for several hours. Then it happened again on Wednesday for the TG flight to Rome. When the prime minister heard of this bomb hoax, his patience finally ran out.

The airline’s internal conflict had not only destroyed its good reputation over 33 years, but also adversely affected the country’s tourism industry. Who wants to fly THAI while bomb threats are aplenty? It had become a national problem.

Late on Wednesday night Thaksin summoned an urgent meeting at his residence. Participating were Dr Somkid Jatusripitak, the finance minister, Wan Mohamad Noor Matha, the transport and communication minister, Pracha, Chaianan and others. Thaksin signalled he would tackle the airline’s problems once and for all.

The script was written well in advance so that the following day, which was yesterday, THAI’s board of directors would meet in an extraordinary session to purge the president. Then its chairman and all 14 members would follow with their resignations to pave the way for a complete shakeup of the airline’s management.

By purging the THAI management, the prime minister would have an excuse to ask Pracha to give up his responsibility of overseeing the airline. Pracha’s presence had added new political dimensions and complications to THAI, which was already spiralling towards selfdestruction. A sidelined Pracha would make it easier to give the airline the shakeup it badly needed.

Wan Nor would be asked to oversee THAI temporarily, while Pracha looked after other agencies.

Yesterday words began to circulate quickly around the capital that Somchaineuk Engtrakul, the permanentsecretary for finance, would be appointed as acting president of the airline as both Chaianan and Bhisit would be removed.

It was not known who advised Chaianan to step down, but he presided over the board meeting at 13.00. Of the 15 board members, only nine attended. They were Chaianan, Somchaineuk, Bhisit, Srisook Chandrangsu, Somchai Boonnamsiri, Sansern Wongchaum, Soonthorn Pokachaiyapat, Gen Monkon Ampornpisit, MR Subhasidhi Jumbala, and Somchaineuk. The size of the board was sufficient enough to make a quorum.

Chaianan said the prime minister had issued an order for him, Bhisit and all the other board members to resign to pave the way for management change. But he had asked that Bhisit be allowed to stay on as advisor to the airline. Since there was no specific advisory position in THAI, the Finance Ministry would try to work out this position for Bhisit.

The meeting lasted 10 to 15 minutes. All the board members were stunned. But they agreed to tender their resignations. THAI had just flown in to the eye of the storm.

Thanong Khanthong, Amornrat Saadsorn

 

 

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