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Piyasvasti assumed the post earlier this month with the ambition of restoring THAI as the pride of Thailand around the world. He says he wants the national carrier to be consistently among Asia's top-three carriers, and among the top five in the world for overall customer experience. But the doctoral graduate from the London School of Economics has no illusions about the size of the task, or the vast challenges facing aviation today.

The following is an excerpt from the interview.

How will THAI be, financially?

We saw improving demand for the fourth quarter, but with heavy price-cutting. Thus, no profit this year, nor bonuses or pay hikes. I feel sorry for the staff, but they need to mobilise forces to boost profits.

In 2010, people will travel more on economic recovery. Prices will go up and we need to eliminate obstacles in ticket selling. Sales through e-ticketing will be raised from 4 per cent of the total to 15 per cent by the end of 2010. Ticket prices will also move more in line with demand and supply.

We will review the routes. Having too many destinations may not be good. Some routes that are unable to cover the funding costs will be cut, but some loss-making flights may be maintained if they can supply traffic to others. THAI acted too late before, in cutting loss-making flights. We will look to increase passengers through allies in the Star Alliance and Nok Air, but there'll be no more price cuts.

This year, we should meet our target in cutting non-oil expenses by Bt18 billion. Fuel refilling now depends on carrying weight. There will be no free first-class tickets for executives and we will also review other benefits. The expense cuts will continue next year.

Oil expenses this year will be Bt48 billion, against Bt90 billion last year. It would be okay if the fuel price was hedged consistently to cushion risks, as ticket prices cannot be adjusted according to fuel costs. The minimum hedging ratio should be 30 per cent.

Are there any more details on the recapitalisation plan?

It will come next year. The amount needed depends on financial results and the company's ability to capitalise on assets like a property fund. Our aim is to bring down the debt-to-equity ratio from 3:1 to 2:1. (Outstanding debts now total Bt160 billion.) Despite new aircraft, we will resort more to leasing rather than outright purchase. Lower debts will help cushion complications like economic slowdowns.

The four-year corporate strategic plan [which includes the recapitalisation and fleet management] should be completed in December, after internal brainstorming with staff and the board of directors, for implementation in 2010. THAI's staff is experienced and capable, but they're scattered. They have knowledge to solve corporate problems.

Aside from the president, all executive vice presidents must be evaluated with their own KPIs [key performance indicators]. On my KPI, 40 per cent concerns financial indicators.

What are your plans on business spin-offs?

We need to be discreet. Some may not survive after the spin-off. Now, they need to be more flexible and all chiefs will be evaluated.

What do you expect to accomplish in the first two years?

In the first year, the focus is on products and services, marketing, maintenance, management evaluation, risk management, financial restructuring and corporate efficiency.

Surveys show the overall service quality remains good, but it's deteriorating. First, we're dealing with what involves passengers - like seats, in-flight entertainment, food, magazines and e-ticketing. This results in THAI's low passenger yield [yield per passenger per kilometre], which is Bt1.90, against Bt2.10 for Singapore Airlines. For each discrepancy of 10 satang, that means a Bt6-billion gap.

While others may be completed earlier, it should take two years to improve seats, with more aircraft to replace the old ones, and in-flight entertainment. Maintenance efficiency must be improved. The scheduled must be kept to ensure smooth operations.

Given that Singapore Airlines flies more business travellers, THAI can't beat it. Still, I'd be happy if we're among the top three in terms of passenger satisfaction.