Was the removal of the Thai Airways President political?

Piyasvasti Amranand, the chief executive officer of the state-controlled flag carrier Thai Airways International, was sacked Monday by the board of directors in a move that Piyasvasti called “politically motivated.”

The board and top members of the government of Prime Minister Yingluck Shinawatra immediately took to the news media to announce there had been no political interference. “There is no political interference in this issue,” Yingluck herself told reporters today.

Piyasvasti’s wife, Anik Amranand, was elected to the Parliament in July 2011 national elections as a member of the opposition Democrat Party. The Democrats were defeated by Yingluck’s Pheu Thai Party. She serves on the board of directors of the party and has been a top advisor since 2009.

Some 12 of 15 of the airline’s board of directors voted to remove Piyasvasti in a meeting held on Monday. Thai International Board Chairman Ampon Kittiampon told reporters after the vote that Piyasvasti had “communications problems” with the board.

Piyasvasti, who was present at the meeting and the press conference that followed, said he had sought an explanation for his dismissal but that he wasn’t given a clear answer. He said he had turned around the airline’s finances from a loss of more than Bt20 billion (US$638.8 million) to profit within two years of taking over, and that he expected a forecast profit of Bt6 billion for the 2011 fiscal year.

“I just want the board to explain the reason,” Piyasvasti told reporters. “It’s ambiguous. The performance of the company during my term has improved in every aspect.”

Piyasvasti, a technocrat with a wide range of government experience, had been rumored to be on his way out as head of the airline virtually since the time the Pheu Thai Party came to power. He was named to head the airline in June of 2009 under the Democrat government headed by former Prime Minister Abhisit Vejjajiva. Piyasvasti had previously served as Thailand’s energy minister from October of 2006 and a wide variety of other roles.

The airline has always suffered from overt political interference, going back decades to the time when it was an adjunct to the Thai military. The Thai Finance Minister announced last year that it would cut its holdings from 51.03 percent to 49.9 percent, selling 0.4 percent to the Crown Property Bureau, the business arm of Thailand’s royal family, which however meant that state control would remain effectively in the hands of the government, no matter what happened to the other 1 percent.

Piyasvasti told reporters that he had achieved an acceptable 86 percent score on his latest personnel evaluation and that it was possible that his ouster had been engineered either by someone who wanted his position, from his investigations in into graft at the airline, or from the fact that he had antagonized unnamed powerful figures by punishing corrupt staff.

After taking over as the airline’s boss Piyasvasti cut staff and launched an energetic plan to renew the airline, placing orders for cost-efficient Boeing 787s and Airbus A350s and refurbishing ageing Boeing 747 and 777 cabins. He also announced plans to phase out the airline’s fuel-inefficient Airbus A340-500s. As a result, cost-cutting enabled the airline to turn around from its record 2009 loss to a record profit in 2010.

The airline is scheduled to take delivery of its first double-deck A380 sometime in the second half of this year. Piyasvasti also delivered plans to launch a domestic and regional carrier, Thai Smile, flying single-aisle Airbus A320s as an adjunct to Thai International’s main international routes. The airline lost Bt12 billion in 2011 as fuel prices skyrocketed by 39 percent as a result of middle east tension, soaring upwards from US$91.40/bbl to US$127.5 over the year. Piyasvasti introduced a fuel price hedging fund to reduce fuel costs, resulting in a gain of Bt909 million, as well as working to improve the company’s financial structure.

Ampon acknowledged that the airline had turned a profit for the first four months of this year, but said Piyasvasti had “encountered problems” in implementing the board’s policies and that he hadn’t performed in line with the policies set by the board.

Communication problems between Piyasvasti and the board were hampering the company’s effort to meet a profit target of Bt 6 billion ($192 million) to Bt7 billion this year, Ampon said, He confirmed that Piyasvasti had passed the company’s annual performance evaluation.

The airline has not an announced a replacement. Chokchai Panyayong is to take over as acting CEO and a committee

Executive Vice President Chokchai Panyayong will become acting president effective immediately. The airline said it is forming a committee that will take as long as three months to identify a permanent CEO candidate, Ampon said.

“I believe the board did this for the company’s benefit,” Finance Minister Kittiratt Na-Ranong told Bloomberg on Tuesday. “I believe it’s not political interference because most of the board was appointed by the last government.”