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THAI Struggles to Sell Decommissioned A340s
16th Feb 2017
It looks like no one is interested in buying Thai Airways International’s decommissioned Airbus A340 planes and has put the flag carrier in a bit of a problem.
THAI acquired the 10 A340s in 2002 and 2003, taking advantage of the low jet fuel prices and intending to use them on international routes. However, they’ve been anything but money savers. Annually, the planes cost the airline between 3 and 5 billion baht and eventually the group had to ground them. At the moment, the planes are collecting dust at Don Muang and U-Tapao airports.
That THAI is facing a big problem here shows the latest action made by about 100 of its staff members, when they called the Thai Prime Minister Prayut Chan-o-cha to invoke Section 44 of the constitution and investigate the acquisition of these planes.
In a new statement, THAI stated, among other things:
When the cost of jet fuel became expensive, other carriers with the same aircraft type in their fleet also experienced the same problem as THAI of incurring losses and decommissioned this type.
The carrier also said it tried numerous times to operate these planes, but could never turn a profit when using them:
An announcement was made of their sale but as there was little demand in the second-hand aircraft market for this type, the aircraft price was lower than the value that the company should have got. Therefore, the plan for sale was revised and a buyer was sought that would benefit from it, for example the Royal Thai Air Force. THAI is a state enterprise with strict adherence to regulations on the sale of assets that at times can prove to be an obstacle to selling aircraft quickly.
The flag carrier also insisted it is looking to improve its aircraft procurement regulations following the bribery scandal involving Rolls Royce, which admitted to paying around $36 million to regional airlines between 1991 and 2005.
This included the purchase of T800 engines by Thai Airways International.
THAI finished the statement saying:
The company has continually placed high importance on transparency regarding procurements, evident through revisions to the procurement regulation. The company will not make procurements through a middleman; a procurement committee must be established with committee members from various departments for a balance of power.
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