Thailand has announced a range of financial austerity measures, throwing into doubt the national airline's five-year fleet re-equipment plan and putting major new defence acquisitions on ice.
The package of economic measures announced by the recently elected coalition Government is aimed at cutting Thailand's ballooning current-account deficit. The new Thai prime minister Chavalit Yongchaiyudh is reportedly looking to make savings of up to 50 billion baht ($2 billion) over the next two years.
In an effort to reduce the deficit from the present 8.2% to 7% of gross domestic product, Chavalit has asked state-owned Thai Airways International to reconsider its 143 billion baht re-equipment programme.
Chavalit has suggested that the airline lease, rather than purchase, any new aircraft.
Thai announced orders in 1996 for 21 new aircraft, consisting of five Airbus Industrie A300-600Rs and four A330-300s, two Boeing 747-400s, six 777-300s and four 737-400/500s, none of which the Government has yet approved. More recently, it signed a tentative purchase agreement for seven Boeing 747-500/600s.
The airline's board plans to meet on 16 January to discuss the matter. Industry officials are confident, however, that the deals can be financially restructured to go ahead. Boeing and Airbus have recently had to reach similar accommodations with cash-strapped Garuda Indonesia on outstanding aircraft orders.
At the same time, Chavalit has ruled out any major new defence purchases for the remainder of this financial year and for 1997/8. Cuts will include programmes already targeted for postponement by the previous Government, including the army's 28 billion baht Star of Siam satellite programme.
In addition, cuts in defence expenditure effectively rule out the provision of any money in 1997/8 for the air force's planned purchase of eight additional McDonnell Douglas F-18C/D fighters. Funding for the follow-on batch of fighters has already slipped once, having earlier been pencilled in for 1996/7 (Flight International, 4-10 December, 1996).
The air force is being asked in the meantime to vacate Bangkok's Don Muang International Airport to make room for urgently needed development to meet new civilian requirements.
The move is in response to repeated delays in completing Bangkok's new airport at Nong Ngu Hao, which will not now be finished until 2003 at the earliest, says the Government.
As an interim measure, Thailand's airport authority has approved a 4 billion baht expansion for Don Muang.
Source: Flight International