Thai Airways stock hopes for boost from US

epa05051248 (FILE) A file picture dated 26 June 2014 shows Thai Airways aircraft lined up at Suvarnabhumi International Airport in Bangkok, Thailand. The Federal Aviation Administration (FAA) downgraded Thailand's aviation safety ratings on 01 December 2015. The US body deemed that Thailand's 'lacks laws or regulations necessary to oversee air carriers in accordance with minimum international standards.' As a result of the findings Thailand's safety rating was downgraded from Tier 1 to Tier 2. The downgrade to Tier 2 means that Thailand will not be granted new flight routes to the United States although existing routes can continue operating. The FAA downgrade is the latest blow to Thailand's civil aviation body. The country's Department of Civil Aviation was audited by the UN affiliated International Civil Aviation Organisation (ICAO) in January and serious gaps were found in safety standards. As part of its audit, the UN-affiliated watchdog gave Thailand's government 90 days to address the problems. Despite internal reshuffles by Transport Minister Prajin Juntong, ICAO formally red-carded Thailand's Department of Civil Aviation in June. EPA/BARBARA WALTON

Bloomberg

Thai Airways International Pcl plans to return to the US market after a United Nations safety upgrade of Thailand’s aviation sector raised the odds of the Federal Aviation Administration following suit.
The state-controlled carrier may add direct flights to America next year if the FAA promotes Thailand to its top safety category, said Krittaphon Chantalitanon, vice president of alliances and commercial strategy.
He reaffirmed the airline will add a maximum of 28 narrow- and wide-body aircraft to renew its fleet.
“Part of the strategic plan is to have the aircraft that would be able to fly nonstop from Thailand to the US efficiently,” he said, adding the company is also paring costs to curb losses and achieve sustained profitability in 2018.
The UN’s International Civil Aviation Organization earlier this month scrapped a red flag that was imposed on Thailand in 2015 over safety concerns, after remedial steps by the nation’s military government. The red flag led to an FAA downgrade to Category 2, which prohibited Thai carriers from adding new services to the world’s top aviation market by passengers. Krittaphon said he’s optimistic the FAA will upgrade Thailand given the progress made by the country’s carriers and civil aviation authority.
“We have been working very hard on cost restructuring,” he also said. “We have to be leaner.”
Thai Airways has declined 25 percent on a total return basis over the past 12 months.

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