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Piyasvasti was reportedly approached by Finance Minister Korn Chatikavanij to head the financially ailing airline.

The top post had been left vacant since Apinan Sumanaseni resigned last November.

Narongsak Sangapong, a senior executive vice president at THAI, has been acting as president over the past several months while the tourism industry and airlines have been devastated by the global recession as well as domestic political unrest.

Now the tourism industry is facing a new threat from the swine flu epidemic, resulting in a further drop in foreign arrivals.

THAI chairman Ampon Kittiampon said after the board of directors' meeting yesterday that the Finance Ministry, the majority shareholder of the airline, would negotiate a compensation package with Piyasvasti.

This should be completed by the middle of next month, after which Piyasvasti will officially take up his office.

An aviation industry source said Piyasvasti was expected to work hand in hand with Pichai Chunhavajira, who crafted a rehabilitation road map for the airline that calls for cost savings of Bt12 billion a year.

This would include delaying the delivery of new aircraft.

The THAI board also approved the borrowing of Bt23 billion from local financial institutions as part of its business rescue plan.

The first Bt5 billion will be secured from the Government Savings Bank this month.

The airline flew back to profit last quarter after reporting a heavy loss in the last quarter of last year.

However, the outlook for this and the next quarter is not encouraging due to the impacts of the global economic slowdown as well as the spread of swine flu.

Piyasvasti held the energy portfolio from October 2006-February 2008. Previously, he was secretary-general of the National Energy Policy Office and director-general of the Public Relations Department.

In the private sector, Piyasvasti worked as chairman of Kasikorn Asset Management and chairman of the panel of advisers to the CEO of Kasikornbank.

Currently, he is an adviser to the Energy for the Environment Foundation.

Political analysts said the choice of Piyasvasti as THAI president sailed through without turbulence as the ruling Democrat Party, whose quota covered Piyasvasti, had already struck a deal with coalition partner Bhum Jai Thai Party, which controls the Transport Ministry.

Bhumi Jai Thai had nominated Ampon, secretary-general of the National Economic and Social Development Board, as THAI's chairman.