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Bankruptcy court finds Thai Airways sunk by graft and mismanagement

Jack Burton

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Bankruptcy court finds Thai Airways sunk by graft and mismanagement | Thaiger
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“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

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7 Comments

7 Comments

  1. Avatar

    TS

    Sunday, August 30, 2020 at 10:59 am

    graft, corruption, mismanagement? Here? Unbeleivable.

  2. Avatar

    Toby Andrews

    Sunday, August 30, 2020 at 12:03 pm

    No believable – this is Amazing Thailand.
    Now that they have the facts, will anyone be arrested?
    Naw.
    This P.M. could make himself very popular if he rounded all those suspected and locked them up without bail.
    But will it happen?
    Naw.

  3. Avatar

    rinky stingpiece

    Sunday, August 30, 2020 at 2:34 pm

    Sounds as much of a gravy train as the EU, maybe they learnt a thing or two from the Eurocrats. It’s also a metaphor for thailand’s tourist and debt bubble economy since about 2014… This correction could set them back 20 years.

  4. Avatar

    Shane

    Sunday, August 30, 2020 at 2:47 pm

    “her was referring”? Some proofreading please?

  5. Avatar

    Stanford

    Monday, August 31, 2020 at 7:50 am

    Corruption , corruption , corruption……….

  6. Avatar

    Sushiki

    Monday, August 31, 2020 at 10:09 am

    Thailand consider as the most corrupt country. Whatever business dealing with government then money upfront must pay first.

  7. Avatar

    ROBERT KEHNE

    Monday, August 31, 2020 at 5:43 pm

    I wonder how much money was spent to come to this conclusion? I am certainly no airline expert but after a few trips I could figure out why Thai was losing money. On a trip from Bangkok-Chiang Mai on an A330 I counted a dozen gate agents working the flight. I watched as two separate crews of 6 went aboard to clean the plane. While onboard (in business class) we were served a meal on the under 2 hour trip. This all seemed very inefficient and expensive to me. Coupled with an aging fleet of 777 and 747 aircraft that are very expensive to operate and maintain it is no wonder at all that Thai is losing money. And, by the way Thai generally has the highest tickets prices on their routes as well.

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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.

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The Thaiger joins forces with Masii to bring you hassle-free Thailand re-entry packages and much more

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The Thaiger joins forces with Masii to bring you hassle-free Thailand re-entry packages and much more | Thaiger

PRESS RELEASE

The Thiager and its sister company Tadoo, have announced they will enter a strategic partnership with the Bangkok-based fintech company, Masii.

Having joined forces with Masii, The Thaiger aims to provide its 6 million-plus monthly users with exclusive deals and packages such as the Thailand re-entry package, comprising of the Certificate of Entry (COE), Covid-19 Travel Insurance and a Covid-19 Test.

Sapir Matmon, of Tadoo, says “This tie-up will allow us to provide our readers with all-inclusive packages specifically designed to make the whole process of coming back to Thailand as simple as possible. And by booking through us, all service fees will be waived – a saving of more than 1,000 Baht. We’re confident you won’t find a better price in the market right now.”

The Thaiger joins forces with Masii to bring you hassle-free Thailand re-entry packages and much more | News by Thaiger

“We can provide everything you need to enter Thailand hassle-free and within 12 hours, which is the fastest in the market.” Says Maxwell Meyer, CEO of Masii.

Covid-19 has drastically accelerated the industry’s movement toward shifting products and services online.

Sapir says “We are tremendously pleased to welcome the Masii team and work alongside Maxwell, as one of the stars of the local fintech scene.”

Tadoo, The Thiager’s sister company, has also teamed up with Masii on their Thai price comparison platform, tadoo.co, which offers a similar range of products including, insurance, finance, internet, and mobile.

The goal of Tadoo is to bring clarity to the Thai market and assist consumers in making better-informed choices by offering a quick and convenient solution for getting the products they want without the hassle.

For more information on the Thailand Re-Entry Full Package, click HERE.

The Thaiger joins forces with Masii to bring you hassle-free Thailand re-entry packages and much more | News by Thaiger

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Coronavirus (Covid-19)

Aviation authority calling for 20,000 vaccine doses for crew, ground staff

Maya Taylor

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Aviation authority calling for 20,000 vaccine doses for crew, ground staff | Thaiger
PHOTO: Christian Junker on Flickr

The Civil Aviation Authority of Thailand is calling for vaccine doses to protect around 20,000 airline crew and ground staff before the country re-opens to international tourists. The CAAT says it’s vital that those working in the aviation industry are protected and has submitted its request to the Centre for Covid-19 Situation Administration.

According to Suthipong Kongpool from the CAAT, there are around 20,000 airline employees, including crew and ground staff, who will need to be vaccinated. As 2 doses are required, a total of 40,000 doses are needed to fully protect staff. The Bangkok Post reports that the CAAT will meet on Thursday to review the aviation sector’s readiness for when the country re-opens without international arrivals having to quarantine.

Suthipong says they are seeking enough vaccine doses to protect employees of Thai-registered carriers.

“It’s a confidence-building measure for tourists and those providing the services to them.”

From July, the southern island of Phuket will be the first part of the country to waive quarantine for vaccinated international arrivals, subject to 70% of local residents being vaccinated. The “sandbox” project is a pilot programme that will be expanded to other areas if it proves successful. Between October and the end of the year, 5 other provinces – Phang Nga, Surat Thani, Krabi, Chon Buri, and Chiang Mai – are expected to adopt the programme. Officials hope to be able to re-open the country fully from January 2022.

According to the CAAT, the first foreign visitors expected to return to Phuket will be Chinese tourists, given that country’s success in managing the pandemic. Meanwhile, the CAAT says Thailand will see a 7% increase in air traffic this month compared to last, with a total of 36,150 domestic and international flights.

SOURCE: Bangkok Post

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Business

Labour union angry over changes to Thai Airways staff contracts under rehab plan

Maya Taylor

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Labour union angry over changes to Thai Airways staff contracts under rehab plan | Thaiger
PHOTO: Wikimedia

Union representatives are questioning changes made to the employment terms of Thai Airways staff as part of the national carrier’s debt-restructuring plan. The labour union claims the changes have removed or diluted several staff entitlements and welfare benefits, pointing the finger at acting president, Chansin Treenuchagron, who signed the orders.

The union is calling on the Department of Labour Protection and Welfare to review the changes to check if they align with a debt-restructuring plan submitted to the Central Bankruptcy Court. According to a Bangkok Post report, the union believes the signed orders may go against the terms of the rehab plan currently being reviewed by creditors. They include an order related to the company’s new organisational structure, as well as the screening of workers who will continue to be employed by the carrier during and after the rehab process.

Union representatives accuse the airline of changing the terms and conditions of employee contracts, meaning weaker welfare benefits. They are asking the DLPW to confirm if the changes comply with the 1940 Bankruptcy Act, the 1975 Labour Relations Act, and the 1998 Labour Protection Act. The union says that if the changes are found to violate the acts, Chansin should be ordered to cancel the orders and draw up new employment terms that comply with the airline’s rehab plan and with employment law.

SOURCE: Bangkok Post

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