Tuesday, September 28, 2010

Committee to probe Thai airline proposal

A joint committee was set up yesterday to resolve whether the country's national carrier Thai Airways International should go ahead with setting up a low-cost airline ongoing questions about the deal.

The committee was set up after Ampon Kittiampon, secretary-general of the National Economics and Social Development Board (NESDB) and also chairman of THAI's board, in accordance with THAI chief executive Piyasvati Amranand and other officials, met with Supoj Sublom, permanent secretary of the Transport Ministry, to explain the reasons for establishing a new low-cost carrier.

Supoj said there were still many questions surrounding the proposal to establish Thai Tiger Airways as a joint venture with Singapore's Tiger Airways. Some had been cleared up but others needed further consideration. Therefore, a committee comprising representatives from three parties - the Transport Ministry, THAI and the Office of Traffic and Transport Planning and Policy (OTP) - was set up.

The committee is expected to hold its first meeting next week before sending a summarised report to the Transport Ministry next month.

"The committee will ponder the main issue: whether the establishment of a joint venture to operate a low-cost airline would be legal or have business disadvantages. The investment plan will be included," Supoj said.

The ministry was also unclear on why THAI could not buy more shares of the existing budget airline Nok Air, he said. However, the authority would invite the THAI CEO to give more details.

The Transport Ministry demanded explanation from THAI on seven facets of the proposal:

lWould establishment of the new low-cost airline impact Thais' travelling, and how?

lWould there be competition between the new venture Thai Tiger Airways and Nok Air, as they both are low-cost airlines? And how would this affect Nok Air's business?

lHow is THAI progressing in increasing its stake in Nok Air to 49 per cent?

lHas THAI explained to Nok Air its objective in setting up Thai Tiger Airways?

lHas THAI informed its employees? What is their reaction?

lWould the establishment of Thai Tiger Airways conform to rules and regulations?

lWhat are the details of the memorandum of understanding between THAI and Tiger Airways, compared with that between THAI and Nok Air?

THAI has responded to all of the above questions in writing since August 17. But there were still many points that needed clarification, which is why THAI was invited to give more information yesterday at the ministry, a source said.

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