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Piyasvasti was one of 11 candidates contending for the post, and the ruling Democrats hope he will be able to save the airline from financial turbulence.

 It is no secret that Piyasvasti, chief adviser of Kasikornbank, was being openly supported by the Democrats, who have taken a while to place their man in THAI's cockpit. As a state enterprise, THAI's largest shareholder is the Finance Ministry run by Korn Chatikavanij.

However, regulatory control of the airline falls under the realm of the Transport Ministry. As transport minister, Sophon Saram of the Bhum Jai Thai Party has been keen to get a firm hold on the airline. Sophon had put forward the name of Dr Amphon Kitti-amphon, the secretary-general of the National Economic and Social Development Board, as chairman of the airline. Naturally, the Democrats would not want Bhum Jai Thai to have a complete say in the national carrier.

Very recently, there was talk among the Democrats that were they to lose control over THAI, they should at least get a grip on the Bank of Thailand. If Piyasavasti did not make it to the top post in the airline, he would have been heading to the central bank as governor.

There has been a tussle between the incumbent Bank of Thailand governor, Tarisa Watanagase, and the Democrats. Tarisa, you see, is not part of their team.

Initially, the Democrats knew the government would not have enough money to cover its expenditure as tax collection was falling sharply. Budget deficit was expected to hit Bt200 billion to Bt300 billion, but actually now stands at Bt400 billion.

Both Prime Minister Abhisit Vejjajiva and Korn have already discussed with Tarisa the possibility of using foreign exchange reserves, which stand at US$120 billion, to help stimulate the economy. Tarisa, however, did not agree and instead rigorously defended the central bank's stance that converting foreign reserves into baht would flout monetary discipline and flood the market with too much money.

Though the Democrats have backed away from meddling in the central bank's affairs, they are still grumbling.

However, Piyasavasti could become their knight in shining armour now that he has landed the post at Thai Airways. The airline's board made way for him by approving a borrowing plan worth Bt37 billion to help improve the cash flow and cover other expenses. Of this borrowing package, Bt23 billion would come from domestic sources - Bt5 billion from the Government Savings Bank, Bt8 billion from Bangkok Bank, Bt5 billion from Siam Commercial Bank and another Bt5 billion from Kasikornbank. The cost of interest should average between 5 and 5.5 per cent.

The remaining Bt14 billion of the loan should come from international financing, which would mostly cover the airline's aircraft acquisition programme.

One of Piyasavasti's qualities is that he is good at numbers. THAI needs him as a leader so he can make banks and creditors believe in the airline's credit worthiness.

THAI's situation might not be as bad as that of United States' General Motors, but the airline would most certainly need to undergo radical restructuring to stay competitive.

Cost cutting would be key as THAI's overheads are burdensome. Plus, with demand plummeting due to the global economic crisis, the airline industry is the hardest hit. Since December last year, THAI has suspended 250 flights to reduce costs and needs to cut costs by another Bt12 billion a year. So far, it has only been able to cut costs by Bt8 billion.

In addition, the airline would need to do something about its cargo, engineering, catering and ground services, which are using a workforce of about 1,000 people even though they only account for 5 to 10 per cent of the airline's income.

It is possible that under Piyasavasti the airline might end up spinning these operations off as independent subsidiaries, which must operate as profit centres. THAI has also mounted staff reduction via a leave-without-pay programme.

A report from Macquarie Research, issued on Monday, said that THAI was currently in urgent need of a recovery plan following a major loss of its profits. It reviewed THAI's situation in light of the type-A(H1N1) influenza pandemic and rising jet fuel prices, and maintains an under-perform recommendation for the airline's stocks to be kept at Bt10 a share.