Thai Prime Minister Thaksin Shinawatra pledged Monday to reshuffle Thai Airways International's management in the wake of a bomb that destroyed one of its jets moments before he was to board, a move that may stall further a controversial privatisation plan.
"The investigation into this affair will lead to some changes in the management," Thaksin told reporters.
Analysts said this indicated Thaksin would use Saturday's events, which left one person dead and seven injured, to keep Thai Airways in Thai hands, a basic principle of his election policy platform.
Thai Airways' board is due to meet Thursday to discuss controversial plans to sell a 10-percent stake to strategic partners as part of a broader plan which would see the government reduce its ownership from the current 93 percent to 70 percent.
"The meeting will be delayed, I guarantee you," said Mark Lavoie, head of research at Asset Plus Securities.
Other analysts agreed that there may be more to a management shake-up than meets the eye.
"Thaksin on one hand says he wants a shake-up, which sounds like it could mean good things, but it could also prolong the process by coming up with fresh reasons not to privatise the airline," said ABN Amro Securities investor analyst Andrew Maule.
Thaksin's government following January elections said it would urge Thai Airways to abandon a plan to sell shares to its competitors in a drive to raise capital.
Ministry of Finance Permanent-secretary Somjainuk Engtrakul said the issue would be addressed at Thursday's meeting.
Somjainuk said all Thai Airways' prospective partners -- Lufthansa, Singapore Airlines and Air France among others -- were competitors and the sale might undermine the company's profitability.
Some industry experts speculated that officials raked in huge profits on the purchase of multi-million dollar jetliners for the airline which dominates the domestic market.
The ministry of finance currently holds a 93 percent stake in the airline, and the share sale plan would reduce government ownership to 70 percent.
In the plan, 13 percent would be sold to local investors, and 10 percent to strategic partners.
The government divestiture is an obligation under a 17.2 billion dollar rescue package approved by the International Monetary Fund in 1997 at the height of the regional economic crisis.
"If he (Thaksin) really wanted to shake-up the airline, he would inject foreign capital," Maule said.
It would be easy for Thaksin to use the explosion to create a six-month delay in the divestiture plan, which his government and airline management bitterly oppose, he said.
In addition to the government's planned divestiture, Thai Airways last year was given cabinet approval to increase its registered capital to 1.7 billion baht (40.5 million dollars) from 1.4 billion baht (33.3 million dollars) via the issue of 300 million new shares.
The airline's senior management had previously said that they expected a foreign partner to be selected by mid-2001.
Meanwhile Thai Airways shares closed down almost one percent Monday, at 30.25 baht, one of the company's lowest stock prices to date – BANGKOK (AFP)
© 2001 Al Bawaba (www.albawaba.com)
