The Thai government is close to approving the sale of its majority stake in flag carrier Thai Airways International and could cut its present 93 per cent holding to as little as 30 per cent by next year.

The Thai ministry of finance, which holds the airline's shares on behalf of the government, has approved a stock sale although no firm date has been set.

A final go-ahead requires cabinet approval but this is seen as a formality after transport minister Wanmuhamad Noor Matha came out in favour of the ministry reducing its holding to just 30 per cent.

The disposal is likely to take place in two phases with the government stake cut initially to around 60 per cent. The government sold 7 per cent in a bond offering in 1992. A sell-off would also help fund an ambitious US$5.6 billion fleet re-equipment programme now underway.

The move will be welcomed by the airline's management, which has been lobbying for some time for a speedy move towards privatisation. Thai Airways president Thamnoon Wanglee has publicly voiced support for privatisation, which management hopes will end interference from influential air force officers who traditionally hold senior board positions.

Meanwhile, Thai's board has endorsed a plan for the airline to take a 40 per cent stake in a new Thai cargo carrier. Other shareholders will be Commercial Transport International with 26 per cent, Thai Military Bank with 12 per cent and Nava Finance and Securities with 12 per cent. The remaining 10 per cent stake will by held by the Thai Air Freight Association.

Tom Ballantyne

Source: Airline Business