The timing of the planned privatisation of Thai Airways remains unclear amid speculation that British Airways could be interested in taking a stake.
Overseas interest in a stake in Thai has been sparked by the proposed raising of the current 10 per cent foreign ownership limit to 30 per cent. Under the proposed privatisation the Ministry of Finance's 79.5 per cent stake in Thai will be reduced to 49 per cent or below.
British Airways has been tipped to take a stake, possibly in partnership with American Airlines. But one analyst questions the wisdom of such a marriage. The source doubts a carrier like BA would be willing to take a stake and remain a silent partner. 'Whichever company gets involved will want control and the military wouldn't want to relinquish control,' he warns.
The timetable for the privatisation remains unclear. Transport and communications minister Suthep Thueksuban has been quoted as saying the sale will proceed when demand and the exchange rate are satisfactory. Despite stiffening against the US dollar at the end of March, the Baht's performance is erratic. Thai has yet to appoint an underwriter for the share issue.
However the share price could be a major delaying factor to add to an unsatisfactory exchange rate. Just three months ago Thai shares were trading at 75 baht but since then shares have slumped to 45 baht.
Thai is targeting cost cuts of some 6 billion baht in 1998. In March, the airline's board decided to delay delivery of 17 Airbus and Boeing aircraft on order and approved the sale of three DC-10-30ERs and five BAe 146-300s.
Source: Airline Business
