Thai Airways president Kanok Abhiradee has set about reinvigorating the carrier with his own personal brand of positive thinking.

Thai airways international president Kanok Abhiradee lists his hobbies as golf, fishing and reforestation. Yes, reforestation. He likes to buy land and plant trees on it before selling it off. He says it is enjoyable and satisfying - and, he notes, 'profitable too'.

There are parallels in this hobby with what Kanok is trying to achieve at state-owned Thai Airways. Since becoming president, he has secured government approval for a major five-year expansion that he expects to help boost annual revenues to 200 billion baht ($5 billion), from last year's 129 billion baht. Essentially, he wants to take what is already there and make improvements to turn a bigger profit.

Thai went through a terrible patch before Kanok was made president early last year, when the airline had been leaderless for months. In October 2000, veteran airline executive Bhisit Kuslasayanon had been appointed president to replace long-serving chief Thamnoon Wanglee, who retired. But, less than a year later, Bhisit was sacked by Thailand's no-nonsense, multi-millionaire businessman prime minister Thaksin Shinawatra.

Bhisit's departure coincided with the resignation of the carrier's 15-member board in September 2001 on the orders of Thaksin, who, for months, had been publicly criticising Thai for its poor service standards and in-fighting, on which he blamed its deteriorating financial condition. At one point Thaksin was famously quoted by a local English-language newspaper as saying that the national flag carrier 'sucks'. Although the prime minister later claimed the translation of his choice of word from Thai, in which he was speaking at the time, should have been 'lousy', it mattered little. The damage was done as the newspaper's story was picked up by media outlets around the world.

The September resignation of its entire board was Thai's second in a year, making 2001 one of the darkest years in its history, during which labour woes badly affected morale, the airline remaining without direction. Earlier in the year, one of its Boeing 737-400s caught fire and was destroyed in a freak accident at Bangkok airport while preparing to depart on a short domestic flight, leaving a steward dead and seven other personnel injured. To make matters worse, prime minister Thaksin was due to have been carried on the aircraft that very day.

After a long-running search for a new president to replace Bhisit, Kanok was appointed at the end of February 2002. He did not come from an industrial background nor have much of a public name, and he had changed jobs relatively frequently. His last position, between 2001 and early 2002, was president of the government's Small Industry Finance Corp, which specialises in lending funds to small and medium-sized businesses. Before that the internationally and locally educated Kanok - who has just turned 55 - headed an online business-to-business procurement exchange site, and previously held senior positions with companies in other industries such as engineering, paint and chemicals, the media and automobiles.

Lack of industry experience

Kanok's nomination surprised many at the time, and some predicted he would be out within a few months, given his lack of industry experience and the unpredictable nature of Thailand's linked political and business environment. But analysts say Kanok has proven himself. The airline is making decent profits again and seems to have regained real direction and fresh momentum with its ambitious growth plans.

Things have not been entirely smooth for Kanok, however. Newspaper reports appeared in the months after he took the job, speculating that he would be pushed out, forcing the board at the end of November 2002 to issue a statement in his support, saying it had 'approved successful completion of probation'. But Kanok has brought his own style to dealing with the carrier's problems, and the actions taken after SARS are examples of the 'new Thai' under his leadership.

The SARS outbreak between March and July this year in key markets badly affected the carrier. Kanok is particularly proud of one thing, dubbed BOOM, for Biological Outbreak Operation Manual. The manual, which provides guidelines on how to handle an event such as SARS, was the first of its kind to be drawn up by an airline, says Kanok, who proudly sent copies to IATA and the World Health Organisation (WHO). He says that the WHO wrote back praising the airline for producing the manual.

Another initiative launched by Thai, as SARS was winding down, was a considerable promotion to reinvigorate demand for air travel. On all inbound flights, and in other prize draws on the ground, free tickets to visit Thailand have been given away - 20,000 in total. The difficulty in mobilising staff and arranging logistics for the exercise are not to be underestimated, says Kanok, who adds that it was an incredibly hard plan to formulate. Under the 'old Thai' such a time-consuming effort would probably never have made it past the discussion stages.

Those who have met Kanok generally agree that he is not a typical Thai executive. He is highly outgoing and is far from shy when it comes to his achievements. Whether it is genuine confidence or just public relations bravado, there is no denying that Kanok's flamboyance energises any room he walks into. And whether the improvements in morale and direction would have been realised regardless, given that Thai was coming away from a terrible year in 2001, there is no denying that Kanok has overseen the airline as results are being produced - and as the government is publicly supporting its efforts.

It is the same ambitious, 'think outside the box' attitude that Kanok wants for Thai's more-than-25,000 other employees. No more being humble, he says. Now is the time to be proactive, rather than just reactive, and to start leading the way in terms of innovation.

'We have been a little bit too shy. We have been a bit too overwhelmed by what we call international standards. Thai used to be number one in this region and sort of faded a little bit. You know why? What we did above international standards was sort of internationalised, and what we were below on we have upgraded. So we have become like any other airline - very standardised, ' says Kanok. 'We respect international standards, but we would like to be above international standards. If you want to be the Asian leader - or you want to be anyone's leader - you have got to be above standard. You have got to be above everybody else.'

Market ambitions

Kanok comes from a marketing background and is clearly still a 'marketing man' at heart. But he insists that the carrier's expansion plans are based on real growth potential, rather than just 'dreams'.

Thai is greatly expanding its international route network and fleet as part of a five-year growth programme launched late last year. The plan calls for 27 new international destinations, representing an increase of around 50%, to be added during the period - and perhaps more than 60 when new codeshare destinations are included. Frequencies are also to be increased to many existing destinations.

In addition, the airline will be acquiring more long-haul aircraft and refurbishing the cabins of existing aircraft, while revamping its organisational structure, cutting costs and launching other initiatives, such as setting up a low-cost carrier, adding dedicated freighter aircraft and making a move to a new home-base airport in Bangkok late in 2005. A long-delayed second public offering of shares since the first in the early 1990s is also planned, to raise cash and reduce the government's stake to 70% from 93%.

With Thai's international route network already covering points in Asia-Pacific, Europe, the Middle East and North America, Kanok says the focus will largely be on China and India in the years ahead. He cites the growth potential of the two already important markets. But the airline will also be adding more long-haul services - including with its Star Alliance partners and other carriers. One agreement under discussion covers possible codesharing on flights recently launched by Kenya Airways between Nairobi and Bangkok.

Since its five-year growth plan was launched last year, new services have already begun to destinations in China, Europe, India and the Middle East. The aim is to increase the airline's revenues, boost tourism to Thailand and help Bangkok, already the busiest airport in South-East Asia, develop further as a regional air transport hub.

Fleet expansion

To cope with network growth plans, Thai recently secured final government approval to expand its fleet with eight new A340-500/600s from Airbus and seven used Boeing 747-400s. It has already ordered the A340s and hopes to acquire the 747s from Star partner United Airlines, although Kanok says Thai will look at alternatives if that tentative deal falls through. Two previously ordered new 747-400s are also to be acquired.

It sounds ambitious, but Kanok does not see the expansion as being too aggressive. He believes there is much room for growth and is adamant that unnecessary risks are not being taken. When asked whether he likes taking risks Kanok says: 'Yes and no. It depends on the type of business I run. With an airline, it requires such huge investment to increase capacity and assets, so I have got to be more cautious than risky. Despite the fact that I am from a marketing background, financial soundness has to come first. That overrides marketing, expansion, dreams - we've got to be realistic.'

But that does not mean Thai will be overly conservative. It is targeting a first-quarter 2004 launch for a low-cost carrier that it plans to establish with a partner company or companies. The new airline will operate domestic services to a handful of points within Thailand as well as international services to other parts of Asia, using aircraft leased at favourable rates from Thai. Kanok says it is vital that the new airline - wherever in Thailand it may be based - has a free rein to be innovative.

To help in this goal, Thai will hold a minimum of 25% of the new carrier's shares and a maximum of 49%. Kanok does not want the national carrier to have majority ownership because that will make it a government-owned company, requiring it to abide by bureaucratic rules for state corporations.

Although low-cost airlines have yet to come to Asia in the same way that they have in Europe and North America, Kanok believes they 'will have to come' to the region eventually, and he would rather see Thai as one of the leaders in this area, rather than a follower. 'This region - not only Thailand - offers that opportunity,' says Kanok. 'But a low-cost carrier in Thailand is too narrow. We have to look at a low-cost carrier as a regional thing.'

The new airline, which has yet to be named, will operate domestic services between Bangkok, Chiang Mai and Phuket, but will mainly have to fly internationally to be a success, he adds. Kanok says the three domestic destinations 'offer enough traffic volume but not enough to grow, so we have got to look at 2.5 billion people [in the region], not just 65 million in Thailand. That's the key.'

Domestic profitability

On the domestic passenger front, meanwhile, Thai is finally making money after years of losses. Over the past year or so, it has revamped its operations by handing many unprofitable routes over to small private operators Air Andaman, PB Air and Phuket Airlines, with which it now codeshares.

Today it serves 13 domestic destinations with its own aircraft, down from 22, while the smaller carriers are able to compete directly with it on the routes it has retained.

'As a result we have done better,' Kanok says, referring to both domestic operating results and service standards. 'We can use that as a reason to convince our people to be more service-minded. The service is better, and we are doing a better job because of competition.'

Kanok also hopes to put an end to perpetual questions about Thai's loyalty to the Star Alliance, insisting it has no intention of leaving the global grouping. 'we're very happy,' he says of Thai's place in Star. 'SARS is probably one of the drivers that inspired the chief executives to work much more closely. Now, because of SARS, we really are serious about the alliance and it works well.'

He says there is no question 'at all' about a defection to the rival SkyTeam or oneworld alliance, both of which have said they would like to have Thai as a member, mainly because of the importance of Bangkok as a regional hub. Thai is a founding member of Star and was publicly unhappy when rival Singapore Airlines (SIA) joined in 2000, giving the competing alliances hope that it could convince Thai to ally with them. But while Thai and SIA do not co-operate commercially, they have learned to work alongside each other in the same alliance without apparent difficulty.

Kanok says it has helped that he has come from the outside - from outside the airline itself as well as the aviation industry. 'Everything now is going through a new way of thinking' at the carrier, which he wants to be more transparent in the way it operates.

'Whoever comes in and heads any organisation has to respect the experience accumulated. I respect my people. They have gone through 30 or 35 years of hard work and they have accumulated so much experience,' he says. 'But the new dimensions, the new mindset, the new approaches on things - it's for me.

Government blessing

Kanok lists his main achievement at the airline as inspiring his employees to think for the organisation rather than just for themselves or their department. But, perhaps more importantly, the airline has been able to regain government support - something that had been lacking for some time. 'Despite the fact that we are highly procedural, I have received the blessing from the government,' Kanok, who is close to prime minister Thaksin, says with obvious pride.

'This is a breakthrough - this is a big breakthrough. The government endorses the wish of Thai Airways International, and says: 'Yes we would exempt you from a lot of procedures, you don't have to behave like any other government agencies.' So there are many windows they have exempted us from, which is good for us. And we have got to exploit it fully, because it has increased our competitiveness.'

With a lot on his plate, the difficult period that he has already been through, and the multitude of vested interests in Thai political and business circles constantly weighing on him, it is no surprise that Kanok no longer has time for his reforestation hobby. But he says he relishes the pressures of the job and when it gets too stressful he simply sings, and that calms him down.

'I look at every opportunity as an opportunity,' he says. 'I also look at every problem as an opportunity to improve. Give me the problems - I always have solutions for them.'

Profile of Kanok Abhiradee: Leading the pack

Kanok Abhiradee was named president of Thai Airways International early in 2002, taking over an airline that had been leaderless for months, following the sacking of president Bhisit Kuslasayanon.

Born on 7 October 1948, Kanok has had a varied career in many industries, but is a marketing man at heart. He started his career in 1972 as marketing co-ordinator for General Motors Thailand, later working for local companies ion other industries such as finance, health services, multimedia and paints and chemicals.

Kanok steadily rose through management ranks at the many companies he worked for, and his last position before taking over as head of Thai Airways was president of the Small Industry Finance Corp, a government-backed financial institution that lends money to small and medium-sized enterprises.

Kanok studied in Thailand as well as abroad. Overseas he attended, among the educational institutions, Stevenage College of Further Education in the UK, City College of New York and the University of Louisville in Kentucky, where he obtained a Bachelor of Science in Marketing.

Kanok is married and has two children.

 

 

 

Nicholas Ionides / Bangkok

Source: Airline Business

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