June 20, 2007

Cabinet orders Thai Airways to lease, not buy, Airbus planes

BANGKOK : Thailand's interim cabinet on Tuesday ordered Thai Airways International to lease eight mid-sized Airbus A330 planes, rather than buy the aircraft as proposed by the flag carrier, officials said.

Airbus had offered the A330-300 aircraft at a heavily discounted price as a key part of a deal to compensate Thai Airways for the two-year delivery delay of six A380 superjumbos.

The purchase of eight mid-sized A330 aircraft to replace old planes would have cost Thai Airways about 30 billion baht (US$867 million), but a cabinet statement released Tuesday said the aircraft should instead be leased.

A transport ministry official said it was a better solution, as Thai Airways was under financial pressure because of high oil prices.

"The cabinet agreed that operating a lease contract for the A330 for up to 10 years is more appropriate for Thai Airways, by not causing the airline a huge debt for buying the aircraft," the transport ministry official told AFP.

"Given the current high oil prices, Thai Airways should lease the aircraft just for the period of five to 10 years while looking for other fuel-efficient models to replace the retiring fleet later."

Thai Airways has targeted to order 40 aircraft over the next 10 years to replace old planes. The company currently operates 86 aircraft.

Airline president Apinan Sumanaseni said the delivery of the leased A330s was scheduled to start in October next year, and would take five years to complete.

"We need those aircraft to partially replace 48 existing ones set to retire within 10 years," said Apinan.

The full of this article's can be read on the source at: Channel NewsAsia

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