THAI Board Resolutions 2012

THAI Board of Directors Meeting Results
 
Today, 20 April 2012, – Thai Airways International Public Company Limited (THAI) held its Board of Directors Meeting, chaired by Mr. Ampon Kittiampon , THAI’s Chairman of the Board of Directors, with the following results.

1.Operating Results for March 2012

The THAI Board of Directors acknowledged the operating results for March 2012 as follows:

THAI's operating performance for the month of March 2012 reflects improvement over the previous month and that of the same month in 2011 with the number of passengers carried in March 2012 up 7.1% over the same period over the previous year. RPK was 7.5% higher than the year before while ASK was 0.1% lower than March 2011. Total system average cabin factor was 78.4% which was higher than 72.9% achieved in March of 2011 where the highest cabin factor average achieved was from Europe averaging 85.3% up from 78.3% whereas Australia and New Zealand routes averaged 67.9% up from 53.6% and the average domestic cabin factor achieved was 77.8% up from 70.9% achieved in March 2011.

For Cargo and Commercial Mail, Available Dead Load Ton-Kilometers (ADTK) for March 2012 was lower than the same month last year as a result of returning the freighter aircraft upon the lease expiration. Commercial aircraft belly cargo volume was 1.9% higher than the same month in 2011. Freight Load Factor averaged at 59.8% which was 0.3% higher than the same month last year.

2.Aircraft Financing for Airbus A380-800 Aircraft THAI's Board of Directors approved long-term financing proposals for the acquisition of three A380-800 aircraft to be delivered to THAI in 2012. Appointed financial institutions for the company’s long-term financing include BNP Paribas Corporate & Investment Banking in consortium with Sumitomo Mitsui Trust Bank for one of THAI’s Airbus A380-800, and Citibank N.A. in consortium with Bayerische Landesbank and Natixis Transport Finance for two Airbus A380-800 aircraft. THAI is in the process of obtaining loan guarantees for these aircraft from the European Export Credit Agencies (ECA).

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Today, 16 March 2012 – Thai Airways International Public Company Limited (THAI) held its Board of Directors Meeting, chaired by Mr. Ampon Kittiampon, THAI’s Chairman of the Board of Directors, with the following announcement.

1. Operating Results for February 2012

The THAI Board of Directors acknowledged operating results as follows: The operating result for February was higher than in January 2012 and higher than the same month last year. There were 1.65 million of passengers, which was 5.2 % higher than in February 2011. Revenue Passenger-Kilometers (RPK) for February 2012 was 5.5% higher than the same month last year. Available Seat-Kilometers (ASK) for February 2012 was 3.6% higher than the same month last year. Cabin Factor averaged at 79.0%, which is higher than the same month last year at 77.6%, with European routes increasing to 88.2% from 82.9%, Australia and New Zealand routes increasing to 72.6% from 66.8%, and domestic routes increasing to 82.9% from 77.2%..

For Cargo and Commercial Mail, Available Dead Load Ton-Kilometers (ADTK) for February 2012 was 4.2% higher than the same month last year. Revenue Freight Ton-Kilometers (RFTK) for February 2012 was 0.6% higher than the same month last year. .

Freight Load Factor averaged at 54.7% which was 3.5% lower than the same month last year due to European debt crisis and returning one of the cargo planes in August 2011. However, compared to January 2012, Freight Load Factor for February was 10.1% higher..

2. THAI to issue and offer debentures .

The THAI Board of Directors approved a plan to issue debentures on a private placement basis in the amount of 1,500 million THB with a 12-year duration. The issuance is to support liquidity used for investment or refinance of previous debt with higher cost. CIMB Thai Bank Public Company Limited is mandated as consultant and underwriter of debentures with the longest duration in THAI’s history.

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24 February 2012 – Thai Airways International Public Company Limited (THAI) held its Board of Directors Meeting, chaired by Mr. Ampon Kittiampon, THAI’s Chairman of the Board of Directors, with the following results.

1. Operating Results for January 2012 .

The THAI Board of Directors acknowledged the operating results for January 2012, which showed improvement after the impact of the flooding in the fourth quarter of 2011, with only the Asia routes showing slower recovery. Numbers of Passenger was 1.75 million or 2.3% higher than the same month last year. Revenue Passenger - Kilometers ( RPK ) was 1.9% higher than the same month last year . Available Seat - Kilometers (ASK) was 2.5% higher than the same month last year. Cabin Factor averaged at 77.3%, which is nearly the same percentage in the same period in 2011, but higher than in December 2011, which averaged at 68.1%. Cabin Factor increased on the European routes at 85.2% from 67.7%, on North America route at 79.1% from 72%, and on Australia and New Zealand routes at 77.7% from 71.8%. .

For Cargo and Commercial Mail, Available Dead Load Ton-Kilometers (ADTK) for January 2012 was 0.8% lower than the same month last year. Revenue Freight Ton - Kilometers ( RFTK ) was 8% lower than the same month last year. Freight Load Factor averaged at 49.7%, which was 7.3% lower than the same month last year as a result of economic slow down in Europe as well as the decommissioning of one freighter aircraft in August 2011. .

2. 2012-2013 Plan for Aircraft Decommissioning and Sales .

The THAI Board of Directors approved the 2012-2013 Plan for Aircraft Decommissioning and Sales as part of the 2012-2022 Long-term Plan for Aircraft Fleet Development, including the aircraft currently on lease to NokAir. .

In 2012 THAI will decommission the following 11 aircraft:.

§ Airbus A300-600 (2 aircraft)
§ Airbus A340-500 (4 aircraft)
§ Boeing 747-400 (2 aircraft)
§ ATR72 (2 aircraft, leased to Nok Air)
During 2012 and 2013, the company will receive the delivery of 25 new aircraft into the fleet.
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Today, 3 February 2012, - Thai Airways International Public Company Limited (THAI) held its Board of Directors Meeting, chaired by Mr. Ampon Kittiampon , THAI's Chairman of the Board of Directors, with the following results.
 
1.  Operating Plan/Business Plan and Action Plan for 2012-2013 and Strategic Plan for 2012-2018
 
THAI's Board of Directors approved the operating plan/business plan and action plan for 2012-2013 and the strategic plan for 2012-2018.   With major factors, such as increased and intensive competition, regional political unrest around the world, European economic crisis and natural disasters, THAI reviewed the Company's corporate strategic plan and concludes that these plans remain appropriate for long-term direction and goals.   Therefore, the Strategic Plan for 2012-2018 continues to focus on strength and the ability to compete in terms of business organizations, customers, products and services, route network, aircraft fleet, information technology, cost, finance and social responsibility.
 
The Company's long-term plan to modernize the fleet from 2012 to 2018 follows:
 
ท Decommissioning of 51 aircraft and leasing aircraft to Nok Air
ท Delivery of 56 new aircraft from 2012-2018, previously approved for 26 aircraft on purchase and 30 aircraft on operating lease
 
Furthermore, THAI will continue to pursue the acquisition of 38 New Generation aircraft according to the 2018-2024 plan that was approved by the Cabinet on 20 April 2011.   The new aircraft would replace the decommissioned aircraft as well as support the Company's expanded flight frequency.   Details of the aircraft type and procurement methods will be proposed to the THAI Board of Directors for approval.   By the end of 2017, THAI will have a more efficient aircraft fleet, reduced fuel and maintenance costs, and reduced carbon emissions.
 
On THAI's long-term operating and financial outlook for 2012-2018, THAI expects Available Seat-Kilometer (ASK) to be at 5 percent per year, which is close to the Revenue Passenger-Kilonmeter (RPK) at 6 percent per year.
   
For THAI's strategic management and business plan for 2012-2013, a majority of strategies will be continued while some will be adjusted.   THAI organizational effectiveness strategy and plan will be clearer with Key Performance Indicator (KPI) applied at the organizational level, strategic planning level and operational level which will be closely monitor.
 
During 2012-2013, THAI will take delivery of 25 new aircraft and will decommission 21 aircraft. Currently, THAI operates flights to 34 countries, to 71 international and domestic cities, with over 800 flights per week.   THAI's route network development plan will focus on regional routes including Asian and neighboring countries in order to maintain THAI's home base market share and growth. In addition, aircraft types and flight frequencies will be adjusted to suit travel demand and travel seasons.
 
THAI's new business unit called THAI Smile is a sub-brand of THAI, offering light-premium services at lower airfares. THAI Smile will start operations from 1 July 2012 onwards flying to Macau as its first destination.
 
On the products and services improvement in 2012 THAI will retrofit 16 aircraft in the current fleet that highlight Thainess.  
 
To gain more loyal customers THAI has a project called the Royal Orchid Plus Consumer Mile (ROP Consumer Mile), where more credit card partners are joining so that ROP members, including corporate customers, can purchase tickets, earn miles and redeem more conveniently through website and mobile service.
 
THAI is concentrating on cost management and cost reduction through strategies to maximize competitive advantage for sustainable future.   THAI will focus on increased work effectiveness and reducing personnel costs and other non-essential expenses that do not affect service quality and safety standards.   On fuel cost, THAI management has in place an oil price hedging mechanism that should see a lower fuel cost in 2012.   THAI also has in place a plan for effective management of currency exchange.
 
THAI is confident that this plan will enable the Company to be strong and to react to changes in the business environment, as well as assist THAI to have positive operating results for sustainable growth.
 
 
2.  2012 Budget
 
THAI's Board of Directors approved the revised budget for 2012, according to the 2011 state enterprise budget regulations for investments.   Due to various factors affecting the business, the previously approved 2012 budget has been revised which now will be reported to the Ministry of Transport and the Office of the National Economic and Social Development Board.
 
This budget revision is due to the 2012 outlook, which the Company expects Available Seat-Kilometer (ASK) to be 78,992 million seats per kilometer, a 0.6 percent increase from last year, while Revenue Passenger-Kilometer (RPK) is expected at 59,226 million, a 7 percent increase from last year. Cabin factor is expected to average at 74.98 percent, which would be 4.61 percent higher than the same period last year. Total revenue for the year 2012 is expected to reach 207,519 million baht, a 7 percent increase from 2011. Given the considerable and intensely competitive environment in the airline industry, the expected operating results are deemed acceptable.
 

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THAI Board of Directors Meeting Results

20 January 2012 – Thai Airways International Public Company Limited (THAI) held its Board of Directors Meeting, chaired by Mr. Ampon Kittiampon, THAI’s Chairman of the Board of Directors, with the following results.

1. Operating Results for December 2011
THAI’s Board of Directors acknowledged operating results for December 2011 as follows:

Cabin factor for December 2011 averaged 68.1 percent which was higher than November 2011 but was exceptionally weak especially for the peak season. The decrease in passenger number was attributable to the recent flood. Although many areas in Bangkok and its vicinity were less affected and some areas having
fully recovered, many passengers still cancelled or postponed their travel to Thailand, especially on international and regional routes. Cargo and commercial mail service was also affected in December as a result of the flood. Revenue Passenger-Kilometer (RPK) for December 2011 was 8.9 percent lower than
the same month last year. Available Seat-Kilometer (ASK) for December 2011 was 0.7 percent higher than the same month last year.

For the period from January to December 2011, the Company’s Available Seat-Kilometer (ASK) was 3.9 percent higher than the same period last year. Revenue Passenger-Kilometer (RPK) was 0.7 percent lower than the same period last year. Cabin factor averaged 70.4 percent, which was 4.4 percent lower than the
same period last year.
Available Dead Load Ton-Kilometers (ADTK) for December 2011 was 4.1 percent lower than the same month the previous year. Revenue Freight Ton-Kilometers (RFTK) for December 2011 was 10 percent lower than the same month last year. Freight Load Factor for December 2011 averaged 54.3 percent, which was 6.2 percent lower than the same month last year.

For the period from January to December 2011, the Available Dead Load Ton-Kilometers (ADTK) was 4.5 percent higher than the same period last year. Revenue Freight Ton-Kilometers (RFTK) was 4.4 percent lower than the same period last year. Freight Load Factor averaged 56.2 percent, which was 8.5 percent lower than the same period last year.
2. Issuance of Debentures via Private Placement
THAI’s Board approved for the Company to secure long-term funding by issuing approximately 1 billion baht 7-year debentures and 2 billion baht 10-year debentures via private placement. The proceeds will be used in the Company’s operations, for asset investments, loan repayment with high funding cost, whereby
the Bank of Ayudhya Public Company Limited has been appointed as advisor and lead underwriter for this undertaking.

3. Cost Management Strategy for Sustainability
The Board acknowledged the initial Cost Management Strategy initiatives which include the reduction of allowances outside of basic salaries, taking three key considerations into account: the sustainability of the national carrier, fairness to all employees, and benefit to all stakeholders. The plan has been approved by
the THAI Executive Management Committee and the Labour Relations Committee and is being implemented for 2012.

The cost reductions, amounting to 602.45 million baht per year, are from various areas. In the area of employee benefits and allowances, The THAI president will waive meeting allowances for participation in Board meetings and other executive management meetings. Members of the Labour Relations Committee will also forego meeting allowances through 2012.

THAI President, Executive Vice Presidents, and Managing Directors have agreed to an 11 month pay for fiscal year 2012.

There will be a curb in public holidays, where THAI offices will remain open for business. In addition, Executive Vice Presidents, Vice Presidents, and Business Unit Managing Directors will have their annual vacation days reduced from 28 days to 24 days.

On a positive note, the Cabin Factor for 1-16 January 2012 is 78.7 percent on average (mainly from European and Australian routes), which is an increase from the same period last year. Reservation for the second half of January averages 77 percent capacity.

4. Appointment of New Board Member
THAI’s Board of Directors approved the appointment of a new Board Member to replace one that has resigned, with effect from 20 January 2012 onward.

4.1 Mr. Silpachai Jarukasemratana replaces Mr. Supot Sub-lom