Thai Airways confirms $500m government loan for two A380s

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Thai Airways International has confirmed that the country's ministry of finance has provided it a $500 million loan to finance two Airbus A380s.

In a disclosure to the Stock Exchange of Thailand, the Star Alliance carrier says that the ministry granted it the loan on 26 June after receiving cabinet and board approval.

The loan has a 17 year term with an undisclosed fixed interest rate. The airline will make repayments semi-annually, with special fee due every January.

"The company is able to reduce its cost of capital while the average loan life is in line with the average life of the aircraft being financed," the airline says.

The disclosure confirms earlier indications from sources that the ministry, which holds a 51% stake in the carrier, would financing the carrier's two A380s. Flightglobal's Ascend Online database shows that the aircraft will be delivered in October and November, completing its order for six A380s placed in 2004.

Thai Airways is also planning to take delivery of two Boeing 777-300ERs this year. The aircraft are leased from BOC Aviation.