Thai Considering Cancelling Surat Route

THAI debt restructuring approved

By Watcharapong Thongrung

The Nation

Thai Airways International's board yesterday approved in principle a Bt20-billion debt restructuring plan while setting a performance target for new president Piyasawasdi Amranand.

The board also nominated Pravit Ratanapien, a former science and technology minister, for executive chairman.

Chairman Ampon Kitti-ampon Ampon said the flag carrier would issue new shares and bonds to refinance its short-term debts with longer-term obligations. A capital increase plan will be completed in March or April.

The airline was expected to return to profitability with net earnings of Bt4 billion for fiscal 2009 ended October, from a net loss of more than Bt20 billion in fiscal 2008.

The board set a target for management to achieve at least Bt33 billion in earnings before interest and amortisation.

To cut its losses, the national airline has already decided to drop three domestic routes - Bangkok-Phitsanulok, Bangkok-Ubon Ratchatani and Chiang Mai-Mae Hong Son.

Nok Air, a THAI affiliate, has been assigned to take over the services on March 1 because it has a lower cost profile.

THAI is also considering terminating another domestic route, Bangkok-Surat Thani.

The airline will ask the Transport Ministry to subsidise its losses if the government insists that these routes keep operating.

The post of executive chairman needs to be filled after Wallop Bhukkanasut resigned over the excess baggage scandal. He and his wife were found to have violated the airline's regulations by carrying more than 200 kilograms in excess baggage during a November flight from Japan to Thailand without paying.

Wallop was recently charged for over Bt200,000 in excess baggage fees.

-- The Nation 2010/01/25

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