yong wrote: ↑Sun Sep 06, 2020 8:59 am https://asia.nikkei.com/Business/Transp ... 3&si=44594

Mismanagement and graft brought down Thai Airways: panel
Purchase of 10 Airbus enriched politicians and others but incurred $2bn loss


Thai Airways filed a petition to rehabilitate under the bankruptcy court's supervision in May. The coronavirus dealt a final blow to the long-mismanaged flag carrier. (Photo by Akira Kodaka)
MASAYUKI YUDA, Nikkei staff writerSeptember 4, 2020 12:00 JST

BANGKOK -- The financial troubles at Thai Airways International, which were so deep it needed court-supervised rehabilitation, were caused by the national flag carrier's own management and workers ripping the company off, an investigation panel commissioned by Thailand's Ministry of Transport has found.

The panel's findings will be considered during Thai Airways' rehabilitation proceedings at the country's bankruptcy court. The report and its findings were submitted on Tuesday to the Ministry of Finance, the biggest shareholder of the state-affiliated airline. According to Thai Airways, the ministry is a major creditor of the airline as well.

On Sept. 14, the Central Bankruptcy Court is scheduled to decide whether to allow Thai Airways' board members and consultancy firm EY Corporate Advisory Services to start writing its own rehabilitation plan. The carrier filed a petition to rehabilitate under the court's supervision in May.

If allowed, the plan is expected to be drawn up by early next year for approval by the court and Thai Airways' creditors. It needs the endorsement of holders of at least 50% of the airline's debt. The panel's findings should give a grounding for creditors, especially the Finance Ministry, on what should be endorsed in the rehabilitation plan.

"The main cause of this chronic issue is the procurement of 10 aircraft: [Airbus] A340-500s and A340-600s," said Deputy Transport Minister Thaworn Senneam. Thaworn worked with the investigation panel led by Chanthep Sesavej, the former commander of the country's Metropolitan Police.

"Once in operation, [Thai Airways] has been making losses [on these aircraft] since their inaugural Bangkok to New York flight in July 2005 up until their decommission in 2013 and [they] remain a burden for maintenance costs even today," he added.


Traditional Thai dancers perform in front of a new A340-500 during a ceremony at Bangkok airport in 2005. The purchase of this type of airplane later weighed on Thai Airways' business. © Reuters

The purchase, in the early 2000s, and operation of the aircraft led to losses of at least 62.8 billion baht ($2 billion), the report said. This indicates that the company had purchased new aircraft based on a weak earnings outlook or with no prospects of positive earnings.

The panel found signs of graft in connection with the purchase of the 10 aircraft. There was evidence of bribes of at least 2.6 billion baht paid to politicians, officials and Thai Airways' executives, according to the report.

Apart from the Airbus deal, a price discrepancy of as much as 589 million baht in operating leases on eight Boeing B787s was also seen. The panel believes that the price gap was used to funnel in some $7.2 billion in bribes paid by Rolls-Royce through middlemen to officials and airline executives for the purchase of engine parts and the payment of a flat rate for repair and maintenance services.

In addition, overprotected workers' rights resulted in their paychecks not being properly monitored. Two billion baht was registered in the 2019 financial results as overtime for repair and maintenance employees. One employee claimed 2.95 million baht ($94,000) for working 3,354 hours, or 419 days, of overtime. This is more than twice Thai Airways' overtime cap of 1,500 hours. There were 567 repair and maintenance employees who exceeded this cap in 2019.

Meanwhile, excessive compensation to executives cost the company 10 billion baht.



These are just some of the issues listed in the panel's findings. As a result of sloppy management, Thai Airways recorded net losses for seven of the past 10 years. The airline made a net loss of 28 billion baht for the first half of 2020, ballooning 4.4-fold from a year ago.

Further investigations will be necessary into nepotism and lack of competition, according to the report.

Relatives and other people close to company executives were hired without having proper knowledge or qualifications, and held good positions in the company, the report said. Materials used for in-flight catering and fuel supplies for aircraft were provided by just a handful of operators, creating a closed circle of oligopoly.

The panel admitted that the investigation was not thorough enough. "Our working group has yet to fully review information and facts of Thai Airways' subsidiaries and joint ventures," said the report. The performance of these entities significantly affects Thai Airways' revenue expenses and operating results, the committee said.

But the panel has only been given the authority to investigate the parent company, as a state enterprise. The company's subsidiaries and joint ventures were not directly state-owned, thus were not within the scope of this probe.

"[The committee] hopes that those with the legal authority will proceed with the results of these findings in order for Thai Airways to regain its strength and profit, to yield fair returns to employees, and to make it a national flag carrier that can be, forever, the pride of all Thais," the panel said in the report's conclusion.

Now that people ae looking under the hood and finding out about all these shenanigans, there could be some serious concern at Rolls Royce and Airbus. Bribery is very much frowned upon in the EU and the Americans, via Boeing and GE (engines) will no doubt be stirring the shit as much as possible. Watch that space...

armchairlawyer wrote: ↑Sun Sep 06, 2020 2:35 pm

Doc67 wrote: ↑Sun Sep 06, 2020 1:15 pm
Now that people ae looking under the hood and finding out about all these shenanigans, there could be some serious concern at Rolls Royce and Airbus. Bribery is very much frowned upon in the EU and the Americans, via Boeing and GE (engines) will no doubt be stirring the shit as much as possible. Watch that space...

Er, the Serious Fraud Office case against RR was settled in the UK in January 2017. For some reason, this did not draw much attention in Thailand (or any of the other six countries involved) until THAI went bust.

"In Thailand, Rolls-Royce agreed to pay $18.8m to regional intermediaries. Some of the money was for individuals who were "agents of the State of Thailand and employees of Thai Airways", the SFO said. These agents "were expected to act in Rolls-Royce's favour with respect to a purchase by Thai Airways of T800 engines".

https://www.theguardian.com/business/20 ... -us-brazil

Told you there would be trouble ( )

Gotta hand it to the thais

Thai Airways opens restaurant using plane parts and serving in-flight meals


The restaurant is decorated with plane parts and seats to lend it an authentic aircraft feel.

More than 100 diners craving in-flight meals after months of travel restrictions flocked to Thai Airways' offices on Thursday to try a new pop-up restaurant and get a reminder of the forgotten flavours of on-board dining.

The national carrier, which has for months grounded most of its planes, has transformed the cafeteria of its Bangkok headquarters into an airline-themed restaurant and opened it to the public.

"I ate a lot," said Pirachat Pengthongworrapetch, 36, who heard about the restaurant online. "It's better here than in the air because it's cooked to order."


Cabin crew greet diners.

"Spare parts from engines, windows and fan blades were used as furniture," Thai Airways Catering Managing Director Varangkana Luerojvong said.

Each decoration has a QR code attached so visitors can look up information about the parts.

Diner Kanta Akanitprachai, 50, liked the idea of a plane meal without having to buy a flight ticket.

"I like the in-flight meals on Thai Airways, but we only get to have it when we fly," said Kanta. "Today we get to have it here, that's good because we want to eat."

Varangkana said the restaurant, which serves about 2,000 meals per day, was a way to recoup some lost revenue during the coronavirus pandemic, and there are plans to turn other Thai Airways offices into similar dining experiences.

https://www.traveller.com.au/thai-airwa ... als-h1qhrh