Thai Airways Secures Loans, Appoints President

Thai Airways said on Thursday it had agreed a combined THB23 billion baht (USD$674 million) in loans from four domestic banks to help fund a restructuring.

The airline's board has also appointed Piyasavasti Amranand, a former energy minister, as president after the previous president resigned earlier this year.

The loans, provided by Bangkok Bank, Siam Commercial Bank, Kasikornbank and Government Saving Bank, would be used for short-term cash flow, Chairman Ampon Kittiampon told a news conference.

"The board approved a funding plan to seek loans worth THB23 billion in the domestic market and foreign loans worth THB14 billion which will be used for Airbus procurement," Ampon said, referring to an order for eight A330 aircraft.

"For the foreign loans, we are in the process of talking with foreign financial institutions," he added.

The total funding plan amounts to THB37 billion, up from a previously announced THB35 billion.

In May the cash-strapped airline said it was considering issuing new shares to raise capital for its long-term restructuring. There was no update on this plan on Thursday.

The airline is restructuring after reporting a record net loss for the fourth quarter 2008. Passengers dropped due to domestic political instability, the global crisis and surging fuel costs.

It reported a net profit of THB7.87 billion in the first quarter, boosted by a foreign exchange gain and lower costs.

The airline, majority owned by the state, is among several in Asia struggling to cope with reduced air travel because of the economic crisis and the jump in fuel costs last year.