Results from THAI’s Strategic Formulation Seminar

Sunday 19 August 2001, Thai Airways International Public Company Limited held a press conference presided over by Finance Minister Dr. Somkid Jatusripitak, Deputy Minister of Transport and Communications Mr. Pracha Maleenont, THAI’s Chairman Dr. Chai-anan Samudavanija, and THAI’s President Mr. Bhisit Kuslasayanon, with results of the airline’s Strategic Formulation Seminar being as follows. The press conference and seminar were held at the Dusit Resort and Polo Club.

THAI organized the Strategic Formulation Seminar for intended purpose of formulating THAI’s corporate strategy, which will be included in the airline’s long term plan. Participating in the seminar were members of THAI’s Board of Directors, Executive Committee, and Management. In addition, THAI invited representatives from the Tourism Authority of Thailand (TAT), the New Bangkok International Airport Company Limited (NBIA), and the Ministry of Finance to participate in the seminar.

As a result of the seminar, it was concluded that five “corporate strategies” are vital to THAI’s strategic planning and implementation, described below:

1. Supportive Strategy

As the national carrier of the Kingdom of Thailand, THAI will further strengthen its level of assistance in supporting promotion of Thailand’s image and reputation.

This includes support of high quality products and services manufactured and originating in Thailand. This is of special importance since THAI serves as a “gateway” into Thailand or initial passenger contact point for travel to and from Thailand.

2. Business Strategy

It was agreed that THAI would continue to stress the importance of its route structure as part of the airline’s market development, with Bangkok as a regional aviation hub being imperative. As well, the importance of growth through partnership was emphasized, being attainable through THAI’s multilateral agreements via Star Alliance, of which THAI is a founding member, a partnership that remains vital to THAI’s business strategy. In addition, maintaining and furthering bilateral agreements remains vital to THAI. Part of the airline’s business strategy also includes plans for the airline’s reorganization, with a proposal to establish business units.

3. Financial Strategy

This strategy reflects the intent to further strengthen THAI’s financial base and investments, in preparation for THAI’s forthcoming initial public offering (IPO) as part of the second phase in the airline’s privatization. Therefore, the airline’s financial structure and accounting procedures will be aligned to international standards, with the intent to decrease THAI’s debt to equity ratio.

4. Operation Strategy

It was concluded that THAI would work towards further improvements in the airline’s products and services, continuing to meets passenger needs and ensure even higher levels of customer satisfaction. For example, an operation strategy for THAI is to continually stress the importance of maintaining flight on-time performance and establish performance measurement of operation standards.

5. Good Governance

The importance of good governance and corporate transparency within the airline’s organization was stressed as being vital to THAI as part of its corporate strategy. By these means, increased levels of professionalism in airline management were deemed important, without government influence. In addition, internal audits were proposed and performance evaluations would be conducted among all THAI employees.

In conclusion, consideration was made concerning Thai Airways International’s proposal to have a vested interest in the construction of the Suvarnabhumi Airport through an investment in the New Bangkok International Airport Company Limited (NBIA). This intended investment in Suvarnabhumi Airport would be pursued with the purpose of attaining optimal investment benefits and without creating a financial burden upon the company.