Thai Airways Takes Cost-Cutting Steps with Goal of Saving Two Billion Baht.

Oct. 3--Thai Airways International will cut costs by two billion baht this fiscal year to adjust to the changed landscape in the global aviation industry.

Cutting flights on unpopular routes, freezing hiring and investment, and closing some overseas offices were among several steps, said Somchainuk Engtrakul, permanent secretary for Finance and acting THAI president.

The airline aims to offset higher fuel costs resulting from detours around risky areas, and higher insurance fees, which will cost two billion baht, or 1.2 percent of its overall annual expenditure.

With tension mounting in the aftermath of the attacks on the United States, THAI is rerouting flights to the Middle East to avoid airspace over Afghanistan, pushing up fuel costs.

"We'd rather fly a longer route that may take 40 minutes more and cost us more fuel than go through the usual route that is now risky," he said.

The terrorist attacks also affected demand on some routes, such as Bangkok-Colombo, on which flights will be reduced.

However, flights were increased to destinations such as China, as passengers had shifted from other airlines, Mr Somchainuk said.