BANGKOK • Thai Airways International said it plans to modernise its fleet by replacing almost 30 older aircraft over the next five years, adding to the climbing demand for planes in Asia.
The state-run airline is seeking new-generation aircraft, offering greater comfort and fuel efficiency, and is talking with both Airbus and Boeing, chairman Areepong Bhoocha-oom said in a Bloomberg TV interview .
"The portfolio of our airline will have new aircraft," Mr Areepong said. It's the right step for Thai Airways partly because fuel costs could be volatile in future even though they are low currently, he said.
The purchases would add to the hundreds of aircraft worth billions of dollars ordered by Asian airlines such as AirAsia and IndiGo in India, amid a surge in the number of people travelling by air in the region.
Boeing forecasts a US$6.05 trillion (S$8.4 trillion) jetliner market in the next two decades globally.
Thai Airways is trying to turn around performance after posting losses in three of the past four years. Its shares fell as much as 5.6 per cent yesterday, the most in more than a month, and are down about 75 per cent from a high in 1999. The stock has eight "sell" recommendations, nine "holds" and one "buy" rating, according to data compiled by Bloomberg.
Concerns that the aircraft purchases could weigh on Thai Airways' financial health appeared to have hurt the stock yesterday, according to Phillip Securities (Thailand) analyst Siam Tiyanont.
"The airline's financial status has recently improved after years of challenges," Mr Siam said. "The plan for new aircraft purchases may be too early and could result in a jump in debt."
The shares slid 4.7 per cent as of 11.46am in Bangkok, compared with a 0.4 per cent climb in the benchmark SET index.
Thai Airways has a 100-strong fleet and will seek Cabinet approval for the plane replacement plan by the end of next month, Mr Areepong said last Thursday on the sidelines of a conference in Bangkok. Airbus's A380 superjumbos will remain a significant part of the company's fleet, while older Boeing 747s will be replaced in the years ahead, he added.
BLOOMBERG
