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People have short memories. Why the Boeing 737 MAX will survive the current crisis.

The Thaiger

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People have short memories. Why the Boeing 737 MAX will survive the current crisis. | The Thaiger

If history is anything to go on people’s current fears about the Boeing 737 MAX jets will be short-lived.

The make0ver of the venerable 737 plane, the most popular passenger jet in history, was supposed to set Boeing on a path to success. Airlines said it was the plane they wanted – perfect for short-haul, cheap to run, new efficient engines.

Boeing didn’t go down the path of coming up with a new single-aisle jet to compete with the new Airbus 320 Neo series, instead they decided to come up with a revised 737. The revised plane has slightly larger and more powerful engines, is a little higher off the ground, features some new hi-tech construction materials making it lighter, upgraded avionics and, importantly, new software that was meant to make it even safer.

You can identify a 737 MAX because of the two-spoke winglets at the end of the wings.

Now two of the new series 737 MAX have crashed within six months with investigators speaking about ‘similarities’ in the early days of the crash investigation.

Travel site Kayak even added an option to screen out flights using the 737 Max jets.

If panic persisted, the media kept writing stories about it and airlines were unwilling to buy it, the future of Boeing would be in jeopardy.

That’s the current situation. But it also reflects a similar time during a four-month period in late 1965 and early 1966 when four new Boeing 727 jets crashed. Three of the crashes occurred while the planes were attempting to land at US airports. Two of them happened within three days of each other in November 1965. The 727 was the first commercial jet to fly with less than four jet engines.

Like the 737 MAX crashes, the US regulator, the FAA, defended the planes’ safety and refused to ground the 727s at the time. It issued a statement the day after the third fatal 727 crash, saying that it could find no pattern in the crashes. It declined to ground the jet.

At the time Boeing was still riding on its reputation built around the Boeing 707 jet, the first successful commercial passenger jet (the British Comet was the first commercial passenger jet in 1952 but had a series of catastrophic crashes from which it never recovered profitable sales).

Eventually the Civil Aeronautics Board, which was created in the wake of the crashes, cleared the 727 and blamed pilot error for the accidents. Pilots were not prepared to fly the 727, and that led to the crashes. The new wings of the revolutionary (for the time) 727 made the plane descend much faster than was possible in the past, giving pilots the chance to slow the planes down faster and land on much shorter runways than the jets of the time, a big selling point.

But the pilots at the controls of the four doomed jets in the 60s were apparently unprepared for how quickly the planes would descend with the new wings.

But Boeing did get past the 727 crisis. Increased training led to safer operation of the plane, and these kinds of crashes ended. Customers soon forgot.

The 727 went on to become the bestselling jet of its time for Boeing. It eventually sold 1,831 of the jets, a lot when flying in jets was still mostly reserved for the ‘jet set’ and people able to afford the expensive ticket prices of the time.

“I don’t know that people will care that much for very long,” says Shem Malmquist, a Boeing 727 and 777 Captain.

“They only worry about the price of the ticket.”

People have short memories. Why the Boeing 737 MAX will survive the current crisis. | News by The Thaiger

The Boeing 727 suffered four high-profile crashes in the mid 60s and went on to become a flying favourite.

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Business

Fish sauce excluded from Thailand’s proposed tax on salty foods

May Taylor

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Fish sauce excluded from Thailand’s proposed tax on salty foods | The Thaiger

PHOTO: Cook’s Illustrated

Thailand’s Excise Department and Public Health Ministry is considering a levy on salty foods in an attempt to tackle the sodium-rich diets of Thai citizens, and the health consequences.

The director general of the Excise Department, Patchara Anuntasilpa says the tax would be calculated based on the amount of salt in a product, with the proposal being sent to Finance Minister Uttama Savanayana by year end.

Fish sauce is a liquid condiment made from fish or krill that have been coated in salt and fermented for up to two years.[1][2]:234 It is used as a staple seasoning in East Asian cuisine and Southeast Asian cuisine, particularly south east Asia and Taiwan. Following widespread recognition of its ability to impart a savoury umami flavor to dishes, it has been embraced globally by chefs and home cooks.

“If the tax is approved, we will allow entrepreneurs one or two years to reduce the salt content and launch a less-salty version of their product.”

The World Health Organisation and the UN both recommend taxing foods with a high salt content, saying increased sodium intake leads to high blood pressure, cancer and kidney and heart disease.

The Nation reports however, that while the proposal is to levy the tax on frozen and canned foods, along with processed items such as instant noodles, seasoning such as fish sauce and snacks like potato chips would be excluded.

The Federation of Thai Industries has pledged to cooperate with the government’s effort to improve the health of Thailand’s citizens, but its head Wisit Limluecha says he is not in favour of taxing popular seasonings, snacks, frozen or instant foods.

“Research has found that these foods represent only 20% of what we eat each day, and everyone has different eating habits, so the better solution would be to advise consumers on how to eat healthily.”

Wisit warns that the tax may damage the country’s competitiveness in the food sector both overseas and in Thailand, where imported products are easily available. He also voices concern that small businesses will suffer if unable to afford ingredient and packaging changes.

SOURCE: The Nation

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500 people own 36% of equity in Thai companies

Greeley Pulitzer

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500 people own 36% of equity in Thai companies | The Thaiger

Roughly 36% of Thailand’s corporate equity is held by just 500 people, highlighting wealth inequality in the Kingdom, according to a study released by the Bank of Thailand’s research institute.

Each of these 500 amass some 3.1 billion baht (102 million USD) per year in company profits, according to the report from the Puey Ungphakorn Institute for Economic Research. In contrast, average yearly household income in Thailand is around 10,000 USD.

A report out this week from the Economic and Business Research Centre for Reform at Thailand’s Rangsit University also pointed to divisive and polarised politics being another root cause of the economic divide.

Thailand’s private sector is dominated by tycoons running sprawling conglomerates. According to the World Bank, the gap between the mega-wealthy and the rest of the Thai population of 69 million is among the many economic challenges for Thailand. According to Bloomberg, the perception of a divide, exacerbated by an economic slowdown, is a major political fault line.

“Magnates arise in Thailand from institutional factors that privilege certain businesses,” said the executive director of PIER, author of the study.

The institute said Thailand needs to promote competitiveness to reduce profits from monopoly power and bolster entrepreneurship to create a more equitable distribution of corporate wealth.

The research is based on analysis of 2017 Commerce Ministry data on the 2.1 million shareholders in Thai firms, and was funded by the University of California San Diego.

SOURCE: Bangkok Post

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Thai Airways must modify rehabilitation plan to survive: Airline President

The Thaiger & The Nation

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Thai Airways must modify rehabilitation plan to survive: Airline President | The Thaiger

PHOTO: gta5-mods.com

“Thai Airways will have to modify its rehabilitation plans to survive in the face of tight competition.” This frank admission by the airline’s president Sumet Damrongchaith.

The national carrier is now carrying a total debt of over 2.45 billion baht and losses of more than 20 billion, despite being able to reduce its debts by 48 billion baht over the past five years.

Sumet says the first step will be to restructure the airline’s management and finances as well as reconsider its plan to spend 1.5 billion baht on 38 new aircraft. He admits the biggest problem is that Thai Airways has low capital but a high debt-to-equity ratio of eight times.

In order to maintain its competitiveness, the carrier will have to reduce its debts versus assets and boost its working capital with support from the ministries of Transport and Finance. Hence, it plans to borrow approximately 3.2 billion baht in fiscal 2020 in line with the budget limit set by the Office of Public Debt Management.

This loan will be taken to support the airline’s investments as well as for its working capital, to update equipment and maintain existing aircraft, but will not be used to repay old debts.

The Nation also reports that the airline is also concerned about maintaining its liquidity because at the end of June this year, its revolving credit line stood at 13.4% of the total revenue forecast for 2019.

Sumet admits that, though the original rehabilitation plan has a set framework, the situation has now changed due to the appreciation of the baht, so in order to achieve goals, the work method has to be redesigned, such as finding a way to procure more passengers.

“We are now in the process of analysing new markets.”

Meanwhile, Thai Aiways’ board chairman Aek-Niti Nitithan-Praphas says the board is reconsidering plans to procure a new fleet taking into consideration the state of the global and domestic economies as well as the US-China trade war.

“The growth of the tourism industry and the airlines’ financial status needs to be reviewed in line with strong competition and routes that are no longer popular. It’s better to carefully revise the plan instead of exposing the airline to greater risk. The target should be reduce expenses by 20%.”

Meanwhile, Thai Airways aims to boost the sale of tickets, find ways of increasing online shopping of duty-free goods and reducing unnecessary expenses by 10%without affecting the quality of service in the last three months of 2019.

The airline is also negotiating the option of cutting down overtime expenses and is looking into curbing losses incurred by it’s semi-budget offshoot Thai Smile by increasing its flying hours to 10.5 hours daily. These steps are expected to help the airline reach breakeven point in the short term.

The airline is also considering long-term goals such roping in more passengers by offering greater benefits to Royal Orchid Plus members, focusing on digital marketing, retiring non-performing assets as well as increasing revenue from related businesses such as kitchens and aircraft repair centres.

SOURCE: The Nation

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