A 20-year old purchase of ten Airbus A340 aircraft for Thai Airways International is still causing headlines in Thailand as the National Anti-Corruption body has cleared three politicians of corruption allegations.
Three individuals, including former PM Thaksin Shinawatra and three cabinet officials, faced a corruption probe after the cabinet approved the purchase of the aircraft for a combined 53.5 Billion Baht between 2002-2004.
THAI has put these aircraft to good use over the span of their lifetime; however, they did indeed prove to be expensive in operation, and Thai Airways famously is an airline that has flown (purchased) every single aircraft type in existence.
After Thai Airways filed for reorganization in a Bangkok Bankruptcy short after the pandemic hit, the carrier stopped being a state enterprise and went on a massive cost-cutting reorganization effort that saw large numbers of staff, routes, and aircraft slashed.
The aviation-related corruption allegations into former Prime Minister Thaksin and two of his cabinet officials aren’t new, though, and his government has also been linked to other corruption cases, for example, the construction of Bangkok’s new Suvarnabhumi Airport.
As the Bangkok Post reported today though, today they have been cleared of the charges related to the Airbus purchase.
The National Anti-Corruption Commission (NACC) has dropped charges filed against former prime minister Thaksin Shinawatra and three others in a corruption case linked with Thai Airways International’s
purchase of 10 Airbus aircraft between 2003 and 2004, according to one of the parties charged in the case. Pichet Sathirachawal, a former deputy transport minister named as one of the accused, disclosed
the NACC’s ruling on Wednesday. The four were accused of dereliction of duty over their roles in the aircraft procurement, which was allegedly found by an investigation team to have been mismanaged and corrupt, causing THAI’s debts to multiply, contributing to the airline’s financial woes.
Mr Pichet said in a television interview on Wednesday that the NACC has thrown out the charges against him, Thaksin, former THAI board chairman Thanong Bidaya and former THAI president Kanok Abhiradee.
In December last year, the NACC pressed charges of dereliction of duty against Thaksin, Mr Pichet, Mr Thanong, and Mr Kanok, while former industry minister Suriya Jungrungreangkit was dropped as an accused. …
Between 2002 and 2004, Thaksin’s cabinet approved THAI’s plan to purchase the 10 A340-500 and A340-600 aircraft worth a combined 53.5 billion baht.
The purchase plan was submitted to the cabinet by Mr Suriya at the time, according to an investigative report. …
There is no doubt that THAI has always been a mismanaged and corrupt airline, however, the carrier needed new planes at the time, and it’s hard to impossible to say if this purchase could have been postponed or structured differently, for example, by leasing instead of buying the aircraft outright.
One can, of course, argue if the four-engine A340 was the right type of aircraft at the time, but THAI wanted a plane that was equipped with First Class, and at that time, this was featured only on the Boeing 747 and then after introduction into the fleet, the A340.
What has not been revealed (or even investigated?) was if anyone in the realm of the airline profited financially from this purchase in the form of a kickback or commission. This would be the only real corruption-related issue in this transaction, as far as I’m concerned.
As reported by The Nation, THAI managed to sell five of the A340’s in 2022 for 350 Million Baht.
Cherdphan Chotikhun, chief technical officer of THAI, said the airline has sold one A340-500 and four A340-600 planes to a buyer for 350 million baht. He said the buyer has already signed a contract to acquire the planes.
Cherdphan said the five planes will be sold at prices higher than their assessed value. THAI is waiting for the Transport Minister to approve the transfer of ownership of the five planes to the buyer.
Cherdphan said THAI still has four decommissioned A340 series planes and the firm was now negotiating with prospective buyers.
The sale of the five Airbus A340 planes was the latest sale of THAI’s decommissioned planes after the national carrier entered a rehabilitation programme.
Cherdphan admitted that it was hard to sell decommissioned A340 series planes and THAI has been trying to sell them for years.
He credited the current successful sale to the rehabilitation programme.
“After we entered the rehabilitation programme, we could disclose full information about the planes and we are now open to prospective buyers with transparency,” Cherdphan explained.
He said THAI had announced the sale on its website www.thaiaircrafttrading.com and sent emails to over 500 prospect buyers.
The A340 series planes were used for direct flights from Bangkok to New York and from Bangkok to Los Angeles. But the two routes generated accumulated losses of 7 billion baht in three years of operations, so the routes were cancelled in 2008.
After the 10 A340 series planes were decommissioned, the Royal Thai Air Force bought an A340-500 plane, leaving nine others parked unused at U-Tapao Airport since then. …
I’ve flown Thai Airways a lot over the last two decades and several times on the A340 as well. I’m not exactly sure about the information in the article that THAI hasn’t used the A340s at all ever since the LAX route was dropped in 2008. They have certainly flown the A340 on European routes since then.
In any case, THAI managed to recoup some money from this sale and freed up parking space at local Thai Airports, desperately needed for all the planes that are currently parked at airports throughout the Kingdom. Truly a sad sight for aviation lovers.
Conclusion
An aircraft procurement dating back two decades was back under the microscope after the case was referred to Thailand’s corruption watchdog. Ex-PM Thaksin, cabinet officials, and cabinet members were investigated over the allegation of squandering money. The commission cleared all of them this week, saying that no foul play was going on.
This investigation was initiated during the reorganization processed and referred to authorities, although there are always political undertones and motivations in play. I find it hard to allege misconduct in this particular case. Mismanagement, maybe, yes. Were ten planes really required to serve the ultra-long-haul LAX route? Did they even consider what would happen to this aircraft type if they had to withdraw from the U.S. route as they eventually did?
