Connect with us

Economy

Bankruptcy court finds Thai Airways sunk by graft and mismanagement

Published

 on 

FILE PHOTO

“Thaworn also claims to have evidence of bribes of at least 5%, or about 2.6 billion baht, to politicians, officials and company executives…”

Troubled national flag carrier Thai Airways, which has filed for bankruptcy  protection and business rehabilitation, was “sunk by mismanagement and graft”, according to a court investigation. Thaworn Senneam of the Democrats revealed that the investigation focused on operations between 2017 and 2019.

The airline has consistently lost money in every year but 1 since 2013 and now has debt of 250 billion baht. The Central Bankruptcy Court recently held 3 days of hearings on the company’s rehabilitation plan and is scheduled to rule on the application on September 14.

Thaworn pointed to the Airbus purchases during PM Thaksin’s time in politics for the start of downward spiral

Thaworn says losses of around 62.8 billion baht began in 2008 after the purchase of several fuel-guzzling passenger jets for long-haul direct flights to the USA (her was referring to the purchase of the Airbus A340 type aircraft).

The bankruptcy panel found the decision to buy 10 Airbus A340-500 and A340-600 jets led to dire consequences. Thaworn said losses were recorded for every single Bangkok-New York flight, from 2005 to 2013, noting that the flights should have been pulled long before the 8 years they were allowed to run.

Thaworn also claims to have evidence of bribes of at least 5%, or about 2.6 billion baht, to politicians, officials and company executives in connection with the purchases. The panel found price differences of as much as 589 million baht in the operating leases for 6 Boeing B787-800 jets and 2 B787-900s.

The minister said the discrepancy stemmed from some 245 million baht in bribes paid by Rolls-Royce, paid through middlemen, to officials and Thai Airways executives for the purchases of engine parts.

Other irregularities include a rise in employee expenses even while the number of employees fell. The panel did not specify the time period reviewed but said overtime pay for pilots and crew rose by 638 million baht, while overtime for repair and maintenance crew rose 530 million baht. Average monthly compensation for employees was 129,134 baht.

Last year, when net losses reached a record 12 billion baht, the overtime for repair and maintenance was 2 billion baht, with some staff recorded as working overtime more than 365 days a year.

In one specific example presented for evidence, an employee claimed 3,354 hours, or 419 days, for 2.9 million baht, against an annual cap of 1,500 hours. His salary was 73,000 baht a month. All told, 567 repair and maintenance employees exceeded the 1,500-hour overtime cap in 2019 alone, costing the airline 603 million baht. The panel says that in 2017, the commercial division also sold tickets at very low prices, benefiting agents who got commission fees and incentives.

Executives of the commercial division transferred colleagues close to them abroad and set sales targets to match the their desired level of incentives. Then, 10% of the incentives were deducted and put into an unregulated slush fund, which commercial managers split among themselves.

Among top executives, the panel found an acting president was paid special cash compensation of 200,000 baht a month. The amount tripled over 9 months in violation of a cabinet resolution and a Finance Ministry prohibition against acting executives at state enterprises accepting more compensation than what they normally get. All told, the panel said, excessive compensation to executives cost the company a staggering 10 billion baht.

SOURCES: Chiang Rai Times | Bangkok Post

 

Get more from The Thaiger

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Jack Burton is an American writer, broadcaster, linguist and journalist who has lived in Asia since 1987. A native of the state of Georgia, he attended the The University of Georgia's Henry Grady School of Journalism, which hands out journalism's prestigious Peabody Awards. His works have appeared in The China Post, The South China Morning Post, The International Herald Tribune and many magazines throughout Asia and the world. He is fluent in Mandarin and has appeared on television and radio for decades in Taiwan, Mainland China, Hong Kong and Macau.

Follow Thaiger by email:

Malaysia10 hours ago

Malaysian beauty salon gets makeover as dentistry school

Thailand11 hours ago

Northern floods tragedy – Monks unable to help

Tourism11 hours ago

Xi’s Bangkok APEC trip to open tourist floodgates

Pattaya12 hours ago

Police to curb Pattaya Beach drinking after student gun fight

Phuket13 hours ago

9th and 10th monkeypox infections found in Phuket

Coronavirus (Covid-19)14 hours ago

Face masks still required on public transport, in cinemas

Join the conversation on the Thaiger Talk forums today!
Cannabis News15 hours ago

Pattaya man attacked at gunpoint for selling cannabis

Crime15 hours ago

Police seize 60 suspects in online ‘ghost guns’ sting

Thailand15 hours ago

Bangkok Secret Nightlife – Bangkok Red Light District Secret Museum

Coronation16 hours ago

King Charles III debuts on UK coins

Politics1 day ago

Vladimir Putin officially annexed four parts of Ukraine

Transport1 day ago

Phuket Airport officials pulled tourist from van, insisted they use airport taxi

Thailand1 day ago

Thailand’s strange laws – 10 strange laws in Thailand

Politics1 day ago

The long goodbye – Which way now for PM Prayut?

Pattaya1 day ago

Pattaya Police Chief cleared of vice slurs, back on duty

Thailand1 year ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand2 years ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism2 years ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket2 years ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism2 years ago

Phuket Thai food treats you need to try | VIDEO

Thailand2 years ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism2 years ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand2 years ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand2 years ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand2 years ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand2 years ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand2 years ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand2 years ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand2 years ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand2 years ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Trending