Paul Lewis/SINGAPORE
Thai Airways International has been forced to place on hold the delivery of seven new Airbus and Boeing aircraft as it struggles to secure $700 million in financing. At the same time, the state-owned carrier has moved a step closer to partial privatisation with Thai Government approval for the sale of one-fifth of the airline's shares.
Thai had been scheduled to take delivery of five Airbus A300-600Rs, a single Boeing 747-400 and one 777-300 between March and September, as part of a larger fleet upgrade exercise totalling 21 new aircraft. With no financing yet secured, four completed A300s are parked in Toulouse and will be joined by a fifth shortly.
Boeing faces a similar predicament with the 747-400 due to be handed over in July, while delivery of Thai's first 777-300 has slipped to October because of problems with seat supplies. An airline source says that none of the aircraft is likely to be delivered before August and, given the Asian economic downturn, it is happy for now to see the jets stay in Seattle and Toulouse.
US banking consortium the World Development Group had been set to provide the needed operating lease financing, but the deal now appears to have fallen through. The problem is complicated by a newly promulgated local bankruptcy law, which could make aircraft repossession difficult. There is no effect, however, on a separate deal for three A330-300s also due for delivery by September with financing from Debis and Credit Lyonnais.
In line with reform measures agreed with the International Monetary Fund, the Thai Government has agreed to release a block of shares which would take its holding down from 93% to 72%. The deal includes the sale of new shares to raise fresh capital.
International carriers are positioning themselves to take a stake in Thai, including British Airways and Australian partner Qantas, Northwest Airlines and Singapore Airlines. The Government has said that the equity sale would not be limited to Thai's five Star Alliance partners, led by Lufthansa and United Airlines.
The Government is to establish a committee to oversee the long awaited and much discussed share sale, but has provided no timetable. "We could see something decisive shortly, or it could take three years. This issue has been around for so long, it's almost nauseating," comments one financial analyst.
Thai shows a narrow net profit in its latest figures, for the first half of its 1998/9 financial year, turning in just over 1.3 billion baht ($3.4 million) for the six months to March. Analysts still project a 17 billion baht loss for the full year.
Source: Flight International
