One year since the flotation of the Thai baht sparked the Asian meltdown, the Thai government has amended the country's 1954 Aviation Act to allow foreigners to control up to 49 per cent of Thai Airways.
According to transport and communications minister Suthep Thuagsuban, the move is proof of the Thai government's sincerity about privatisation. In recent months the Thai flag carrier has been linked with various suitors but most industry analysts believe the only serious contenders are British Airways/Qantas and Singapore Airlines. Although Thai president Thamnoon Wanglee states that Star Alliance partners will get priority in the bidding, BA/ Qantas is not out of the race, says analyst Peter Negline of Salomon Smith Barney.
One airline source suggests that the Thai military's influence over Thai Airways' future is on the wane. If the Thai government had its way, the privatisation would take place tomorrow, says the source. Negline says the timing is dependent on market conditions and could happen in the second half of this year.
Minister Suthep Thuagsuban confirms that the initial stage of the privatisation will see Thai raise private shareholding levels to 30 per cent. As part of a restructuring plan, Thai will set up wholly owned subsidiaries for aircraft maintenance, information technology and reservation systems. The airline's management is likely to be revamped to streamline the decision-making process.
After a heavy first-quarter loss, Thai has reported a second quarter net profit of 28 billion baht (US$674 million). First half profits to March 1998 were down over 50 per cent from 3 billion baht in 1996/7 to 1.3 billion baht.
Source: Airline Business
