Saturday, April 25, 2009

THAI bookings slump 20% in ten days

POLITICAL FALLOUT


Published on April 24, 2009

Thai Airways International has witnessed a 20-per-cent drop in bookings since the government imposed a state of emergency on April 13, a move that has scared away Asian tourists - mostly from China, South Korea and Japan.

Acting president Narongsak Sangapong said yesterday that this factor, coupled with the global economic crisis that has depleted the number of tourists from Europe, meant THAI's cabin factor for the period March to May had fallen to as low as 75-76 per cent, against 85-90 per cent in the same period last year.

"The state of emergency should be revoked as soon as possible to reduce the negative impact on the tourism industry," he said.

He added that THAI would try to win back business by joining hands with the Tourism Authority of Thailand and private operators in launching joint promotions aimed at attracting visitors to the Kingdom in the second half of the year.

Attorney-General Chaikasem Nitisiri, vice chairman of the airline, said that despite the violence on Songkran Day, THAI still maintained its goal of posting a net profit of Bt4 billion this year.

"Luckily, the violence was diffused quickly. The situation should not get worse if the airport is not shut down again," he said. THAI has claimed damage of Bt20 billion as a result of Suvarnabhumi Airport's 10-day shutdown late last year.

The airline suffered a net loss of Bt21 billion last year, due largely to the political conflict, spiking jet-fuel prices and Bt4.29 billion set aside against possible damage from antitrust and competition cases in the United States, the European Union, New Zealand, Australia and South Korea.

Niruj Maneepun, vice president for THAI's legal department, yesterday said he expected the EU case to wind up before the others, probably late this year. Meanwhile, US passengers are being enlisted for a class-action lawsuit, which will take time before the case goes to court.

He said the reserves of Bt4.29 billion were based on initial penalties that THAI would have to pay if it lost cases involving surcharges. The carrier has set aside Bt807 million as legal fees, of which it has already spent Bt70 million.

The national carrier's shareholders at an eight-hour meeting on Wednesday appointed 13 directors, including Finance Ministry permanent secretary Suparut Kawatkul.

The nomination of Suparut angered some minor shareholders, who said he should be disqualified following the National Anti-Corruption Commission's recent confirmation of an earlier ruling that he had violated civil-service rules.

However, Chaikasem insisted that despite the NACC ruling, no action had yet been taken against Suparut and he therefore remained qualified for the directorship.

Other directors include Surachai Tansitpong, permanent secretary of the Transport Ministry, Wallop Bhukkanasut and Banyong Pongpanich.

Chaikasem added that the new board would convene as soon as possible to appoint a chairman. The first meeting agenda could also include the airline's medium- and long-term business-improvement plan, which entails restructuring.

It is also anticipated that THAI will welcome a new president by then. Narongsak said that within two weeks, it should be known who among the 11 applicants would be the new incumbent.

In his capacity as acting president, Narongsak will next week submit the business-improvement plan to a UK financial institution, with a view to tapping funds to ease THAI's liquidity shortage.

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