Thu, Jan 29, 2009 - Page 6 News List

Thailand says Thai Airways’ financial situation ‘alarming’

AFP , BANGKOK

Thai Deputy Prime Minister Suthep Thaugsuban said yesterday that the financial state of flag carrier Thai Airways was “alarming” and promised the government would step in to help it.

Suthep proposed talks between the finance and transport ministries to resolve the crisis at the airline, in which the government holds a majority stake.

“The problem at Thai Airways is very alarming and the government will take care of it absolutely,” Suthep told reporters. “I have to admit that the government is very concerned because as of now the airline still has not submitted its rehabilitation plan.”

On Tuesday Finance Minister Korn Chatikavanij insisted the carrier would have to submit a detailed recovery plan in order to receive taxpayer funds.

In a statement to the Thai stock exchange last week, Thai Airways said it needed 19 billion baht (US$544 million) to resolve its liquidity problem this year.

It also hoped to raise 15 billion baht to replace short-term debt, the statement said.

A Thai Airways official yesterday blamed its massive drop in revenue on political upheaval in Thailand, as protests against the previous government dragged on for most of last year, coupled with the global financial crisis.

“The airline began to suffer losses in the second half of last year because of internal political chaos,” he said, highlighting the week-long blockade of Bangkok’s two airports by protesters late last year as a particular blow.

“This triggered a decreasing number of passengers, and refunds for passengers who had already booked,” he said.

The airline said last year it had lost about 20 billion baht because of the closure of Bangkok’s airports, which stranded around 350,000 passengers.

Last week Thai Airways said it would move all its remaining domestic flights from Bangkok’s Don Mueang airport to the new Suvarnabhumi Airport to save up to 700 million baht a year.

Thai Airways previously said it would ask to delay the delivery of six A330 aircraft from European aircraft manufacturer Airbus due to a shortage of cash.

Thai Airways’ net loss for the first three quarters of last year was 6.61 billion baht, against a net profit of 2.53 billion baht for the same period in 2007, company figures show.

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