Thai Airways International has finally won approval from the Thai government for an aggressive five-year expansion, covering the purchase of 15 widebody aircraft and the launch of many new international routes.
The go-ahead came on 5 August, and a day later Airbus confirmed that the state-owned carrier had ordered three ultra-long-range A340-500s and five larger A340-600s. The aircraft are to be delivered from 2005. The A340-500s will be used on new non-stop services from Bangkok to the USA, while the A340-600s will be used on services to Europe.
The order is part of a move in which Thai says 27 new destinations will be added to its network, helping to increase annual revenues to around 200 billion baht ($4.8 billion) from around 125 billion baht. The airline also aims to buy seven used Boeing 747-400s from Star Alliance partner United Airlines.
Thai has been working on the purchase of the 747-400s since last year, although it remains subject to the approval of the creditors of United, which is restructuring under US Chapter 11 bankruptcy protection. Thai has said it wants to take delivery of four of the 747-400s in October, with the other aircraft deliveries staggered between 2004 and 2006.
In a separate move, Thai says it will proceed with a share offering in November or December after years of delays. President Kanok Abhiradee says now is a good time to act since stock market conditions are good and Thai's business has recovered strongly, following the containment of SARS.
Thai board member Somchainuk Engtrakul, who is also the finance ministry's permanent secretary, says the public share offering will raise around 15 billion baht from the issue of 300 million new shares. The ministry is also expected to sell 100 million shares.
The carrier's government owner has been talking about a share offering for more than five years, but it has been repeatedly delayed. Thai is 93% owned by the state, but the sale of 400 million shares will reduce its stake to 70%.
As Thai plans to expand, start-up Thai Pacific Airlines is aiming to begin 747-200 services from Bangkok to Sydney in October. The airline is planning to dry-lease two 747-200s from Kuwait Airways, and wants to operate from Bangkok to Osaka as well.
Source: Airline Business
