Saturday, August 09, 2008

Avation: Fate of two airlines still up in the air

One-Two-Go, Orient Thai explore options

An air of uncertainty surrounds whether Orient Thai Airlines and its budget carrier One-Two-Go, now facing a 30-day suspension due to poor safety standards, will be flying again.

The relaunch largely depends on whether the carriers can overcome mounting problems related to restructuring and getting licences back from the Department of Civil Aviation (DCA).

Embattled founder Udom Tantiprasongchai yesterday declined to specify whether operations would resume if the DCA's current audit reaches a positive conclusion on Aug 21.

He also remains uncommitted to the announced schedule to restart flights on Sept 15, telling the Bangkok Post yesterday that it was a ''tentative'' date first mentioned in a July 18 statement announcing a 56-day grounding.

''The future lies in how we tackle pending problems,'' said another management insider.

The latest headache involves disputes with employees who would be laid off over the terms of compensation as part of the airlines' restructuring plan.

These employees, reportedly numbering as many as 200, out of a total 1,000 on the company's payroll including 80 cockpit staff, had sought assistance from the Labour Department that they would be fairly treated under the law.

About 100 staff One-Two-Go staff rallied yesterday at Don Mueang airport to demand fair compensation. They also demanded the 50,000-baht insurance fee that the company had collected from them in exchange for previous flight attendant training.

Mr Udom said that management would take full responsibility for the layoffs but first it had to get its finances in order by processing refunds for unused tickets of customers.

Mr Udom said he had cleared the air with the employees, assuring them of compensation in line with the legal severance framework, and would pay the amount in installments.

He asked the staff to decide whether they wanted to stay with or leave the company, so that management could finalise the total compensation budget within this month.

Airline employees said those who choose to remain with the carriers would see their salaries decline on a sliding scale by 15-50% as part of the cost reduction campaign.

Mr Udom has reportedly been in talks to woo some investors, including those overseas, to provide fresh capital. ''We are open to many options,'' he said.

A new airline model for One-Two-Go, which may do away with the budget airline structure, could be adopted and the group may concentrate more on charter flights and less on scheduled services.

''In the past, we (One-Two-Go) might have exhausted our resources in competing somewhat unnecessarily with rival budget airlines with a nationalistic motive in a deadly race,'' he said, referring to the fight with Malaysia-based AirAsia.

Mr Udom said the airlines' current preoccupation was to do everything possible to meet DCA safety standards, as the airlines were starting anew.

The DCA suspended the airlines for poor safety standards and management, and falsification of documents by some pilots who had misstated their level of aviation proficiency.

Regulators revoked the flying licences of seven foreign pilots, six Indonesians and a Venezuelan, and suspended the licences of two Thai pilots.

A senior DCA official said the department was pleased so far with the airlines' compliance with safety standards they were asked to follow.

''If they are able to fulfill the requirements, we (DCA) are ready to return the licences to them,'' he said.

The airlines are also facing a string of huge compensation lawsuits in the US courts by lawyers representing British and American families of victims of One-Two-Go flight OG269 which crashed in Phuket on Sept 16, 2007, leaving 89 dead and 41 injured.

click here Fate of two airlines still up in the air
Bangkok Post, Thailand