Thai Air May Delay A380s, Sees Return To Profit
Thai Airways said Thursday it wanted to talks with Airbus about delaying delivery of six A380 superjumbos as part of an overhaul of its business aimed at putting it back into profit this year.
The restructuring may affect its fleet and flight schedule, so it needed to talk with Airbus about delivery dates for the A380s due in late 2010, Pichai Chunhavajira, head of a team overseeing a new business plan, told a news conference.
"We are exploring how to delay the delivery. If we could, that would be good. We will also look at flight schedules and routes, which need a review," he added.
Airbus declined to say how talks might go.
"We are in constant talks with our customers, but these talks are confidential and we do not communicate on delivery positions," head Airbus spokesman Stefan Schaffrath said at the plane maker's headquarters in France.
Pichai said the delivery of six A330 aircraft would be on track for this year despite a delay of a few months.
Thai Airways has ordered eight A330 aircraft in total. The first delivery is due this month.
Pichai forecast the state-run national carrier would make a net profit of about THB6 billion - THB7 billion baht (USD$169 million - USD$197 million) in 2009.
It is in the process of overhauling its operations after reporting a record net loss for the fourth quarter of 2008 of THB14.8 billion and a full-year loss of THB21.4 billion.
Thai Airways is among several Asian airlines struggling to cope with reduced travel because of the global economic slowdown and a surge in fuel costs last year. It was also hurt by political instability in Thailand that cut tourist numbers.
The 2009 net profit forecast was based on the assumption of earnings before interest, tax, depreciation and amortization (EBITDA) of THB33 billion, Pichai said.
"If we follow the plan, we should be able to get THB33 billion EBITDA and net profit of about THB6 billion - THB7 billion," he said.
SHARE PRICE RECOVERY
Thai Airways shares have risen nearly 30 percent over the past month due to optimism over the business plan, which should also improve ticketing systems and cut non-fuel operating costs by 10 percent this year.
The cash-strapped airline will negotiate with creditors on rescheduling payments on THB15 billion of debt and it plans to borrow THB20 billion to boost cash flow, Pichai said. "The repayment period will be extended for another year," he said, adding the negotiations with creditors and talks on new loans would be completed in the next few months.
Under the business plan, which is subject to approval by the government, the airline's debt-to-equity ratio was targeted to be cut to 1.5 from above 3.0 now, Pichai said.
"We are considering several ways to improve operations, which include the possibility of raising capital or converting debt into equity," said Pichai, also chief financial officer of state-controlled energy firm PTT.
