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TG aircraft NOT for sale to Saudi Prince

November 25, 2013 Aviation, Headline News No Comments Email Email
egtmedia59THAI (TG) has resolved not to sell one of their four decommissioned A340-500s to British firm, AvCon Worldwide, despite them having already put down a deposit of USD $2.5 million. 
AvCon represents the interests of Saudi Arabia’s Prince Faisal al-Saud. Thai authorities had forewarned that AvCon’s proposed acquisition price of USD $23.5 million was too low and are now considering possibilities to make use of the planes and will propose the finding to the airline’s board by next month.
THAI executive vice-president Teerapol Chotichanapibal said that should the aircraft fail to find buyers, THAI would likely consider redeploying them into operational use on flights limited to 4 to 6 hours, Japan in particular. “It would be OK to cover their maintenance costs,” he said. “It’s difficult to make profits because fuel costs of these planes are high.” image
THAI had placed a book value of USD $66.9 million on each of the aircraft which are fast disappearing from the skies given their poor fuel economy.
Using these aircraft, the airline was once the operator of two of the world’s longest nonstop routes between Thailand and Los Angeles and New York, but due to high fuel prices the airline abandoned all nonstop U.S. services in 2012 indefinitely.
Thailand’s Nation newspaper
recently reported that  THAI’s proposal was submitted for the board’s consideration about two months ago. Some directors were concerned that the low price would result in the immediate loss of Bt 4 billion from the sale of the four planes. Observers said the sale would benefit THAI in the long term, as the planes are now parked idly at Don Mueang Airport.
Delaying the sale would cost the airline Bt 1.3 billion a year in depreciation. By 2018, that would add up to Bt 6.5 billion.
THAI introduced the airliner into its fleet in May 2005, however due to combined losses of more than Bt7 billion, the LAX and NY service were withdrawn. In May 2012, THAI decommissioned the four aircraft and began looking for buyers. The planes have been used only on special occasions since, such as some government overseas trips.
Airbus Industrie itself announced in November 2011 that the A340 programme had been terminated because of the lack of new orders.
Few buyers exist for old planes however, because of the A340’s high fuel consumption. THAI will have difficulty in finding an alternative buyer.
Written by : Andrew J Wood

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