Thai Airways to propose securing 28 new planes over 5 years

Corporate June 16, 2017 01:00

By   THE NATION

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THAI AIRWAYS International will next month propose to its board the procurement of 28 new aircraft over five years to replace those gradually going out of service.



“We want to maintain our base. We have 100 aircraft and want to maximise  [their] efficiency. If we do not increase flights or frequencies, we can stay with 100 aircraft,” Usanee Sangsingkeo, acting president of the flag carrier, said after the THAI board meeting late on Wednesday.

“Today, we’re profitable and can manage. The [details] of the procurement will be waiting for the manufacturers’ proposed specifications and prices,” she said.

Of the 28 new deliveries, 19 will go to THAI and nine to Thai Smile, THAI’s wholly owned subsidiary. 

After the fleet-modernisation plan is submitted to the board, it will be forwarded to the State Enterprise Policy Office and then the Cabinet in August so that orders can be placed starting in the fourth quarter.

Areepong Bhoocha-oom, THAI chairman and permanent secretary of the Energy Ministry, said the aircraft-procurement plan would follow the 2012 regulation that requires several committees’ consideration.

The first committee has completed its consideration and will file a letter of intent with aircraft manufacturers next month. 

The investment model has not been finalised yet, whether it will be a purchase or lease, as that will depend on the planned decommissioning of aircraft. 

Regarding THAI’s decision not to increase Nok Air’s capital, Usanee said the low-cost carrier did not present clear management and financial plans, while insisting THAI has given full assistance to Nok Air.

If Nok Air’s board agrees on the capital-mobilisation plan with good conditions for the second time, THAI, which holds 21.5 per cent of Nok Air, is ready to subscribe to Nok’s capital-increase shares. 

Nok Air capital plan

“THAI will not be affected financially if it purchases new shares of Nok Air, as we have enough EBITDA,” Usanee said, referring to earnings before interest, tax, depreciation and amortisation. 

“But we have to be aware of THAI as a state enterprise and of its shareholders. If Nok Air has a specific plan and gives us a return on investment, it’ll be acceptable. 

“We have to wait and see what Nok Air proposes and who its strategic partners are,” she said.

THAI’s board at a recent meeting assigned Somchai Sujjapongse, permanent secretary of the Finance Ministry and chairman of the nomination committee for THAI president, to expedite the opening of the second round of applications for the president’s position.

In the first round, four candidates did not meet THAI’s requirements. There are two qualifications for THAI president – excellent knowledge and expertise in management , and communication with its employees to drive its reform as targeted.

The board did not give the green light to the resumption of Bangkok-Vienna services at this meeting, citing the need for further study.

The procurement plan is for 10 Boeing 747-400 aircraft, seven Boeing 777s and two Boeing 737s for THAI. 

Thai Smile plans to have nine Airbus A320 aircraft be out of service after the rent contract’s expiration is approaching.

Last quarter, THAI recorded an average cabin factor of more than 80 per cent, higher than in the same quarter of last year, while its reservations for next quarter are 9 per cent higher, Usanee said. 

 

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