Thread: Thailand to suffer most in economic crisis

"Thai Airways posts huge loss in 2008

By: AFPPublished: 28/02/2009 at 06:23 PM Flag carrier Thai Airways posted a huge loss of 21.3 billion baht ($592 million) in 2008 because of high fuel prices and protests that briefly shuttered Bangkok's airports, the company said.

The airline made a profit of 4.4 billion baht in 2007, and last year's plunge was the company's first annual loss in 43 years.
"For the fiscal year 2008 Thai Airways International continues to encounter crises such as the continuing sharp rise of jet fuel price, the global economic slowdown as well as the political unrest in the country," the airline said.
In the statement released late Friday, Thai Airways also blamed foreign exchange losses due to the weakening of the Thai baht.
The national carrier reported a 1.6 percent year-on-year increase in its total revenue to 200.1 billion baht, but its operating expenses were up 10.8 percent to 206.8 billion baht.
The airline also reported foreign exchange losses of 4.5 billion baht.
Thai Airways is currently in talks with the government over a rescue package to help revive the struggling carrier's finances.
Finance Minister Korn Chatikavanij has insisted the airline must submit a detailed recovery plan before it receives taxpayer funds.
Thai Airways officials have previously said that the company lost about 20 billion baht when protesters trying to topple the last government seized and shut down Bangkok's two airports for a week in late November to early December.
The occupation stranded around 350,000 passengers in Thailand and battered the kingdom's vital tourism industry.
In January, Thai Airways said it would ask for a delay in the delivery of six A330 aircraft from European aircraft manufacturer Airbus due to a shortage of cash."


Please note the loss 21,3 billion Baht, further down in the artikel Thai Airways executives is quoted for claiming that the Airport closing by PAD cost TA 20 billion Baht. !!

In another piece in Bangkok Post it is stated that Thai Airways internationals bets against high fuel prices in the form of hedging have given losses of 6 billion Baht .

And on that note we continue-


"PAD LET OFF THE HOOK

Foreign carriers feel pressing charges against protesters is not worthwhile, writes Boonsong Kositchotethana

By: Published: 20/02/2009 at 12:00 AMNewspaper section: Business Many airlines and aviation service providers are allowing the People's Alliance for Democracy (PAD) to go scot-free for seizing Bangkok's airports, which cost the economy more than 200 billion baht and ruined Thailand's international image.
International airlines such as British Airways, Cathay Pacific, Etihad Airways, Singapore Airlines and local carriers such as Bangkok Airways and Thai AirAsia are not pushing lawsuits to seek compensation for the damage done by the anti-government movement last year.
In a survey of players in the aviation industry by the Bangkok Post, there seems to be a consensus among them that an endeavour to pursue legal action against the PAD may not worth the energy, time and costs involved.
Most airlines have written off their losses as the cost of civil unrest and are moving on with the business of staying aloft through the crisis.

They are resigned to what they regard as the ''civil unrest'' nature of the event after consulting with their legal experts who indicated that it might be difficult to win the case in civil courts.
They considered this sort of unrest part of the risks they have to assume while doing business.
Some also sense that the Abhisit Vejjajiva administration is not really keen to hold the PAD accountable for laying siege to Suvarnabhumi and Don Mueang airports from Nov 25 and Dec 4 last year in spite of the disastrous effects it caused.
Thousands of the PAD activists stormed the airports to demand the removal of the Somchai Wongsawat government which they accused of being a corrupt nominee of the fugitive former premier Thaksin Shinawatra.
The protesters dispersed after a court ruling to dissolve three parties brought down the government.
The blockade left 350,000 visitors stranded and prevented 3.4 million tourists from visiting Thailand, severely denting the kingdom's tourist-friendly image.
The most recent study by the Bank of Thailand estimated losses of 210 billion baht from the airport closure. That amount represents 2% of gross domestic product (GDP) based on 2009 prices.
The same study predicted that tourist arrivals in Thailand this year would fall 0.8% year-on-year to 14.3 million. Thailand's tourism industry accounts for 5% of GDP and employs two million people directly and indirectly.
Airline managers and operators of aviation supporting facilities would rather concentrate their efforts on getting their businesses back on track and swallowing the financial costs incurred to them by the political standoff.
''There is no reason for us to take legal action (against the PAD). We don't think we can get any compensation. It is difficult to win such a lawsuit,'' said Aaron Chan, Cathay Pacific's manager for Thailand.
The airline did not even bother to count the revenue it lost during the 10-day airport shutdown, though it has shouldered about four million baht from paying hotel, food, and transport bills for its stranded passengers as well as allocating manpower to help them.
''I'm not here to chase after somebody. I have a more important thing to do _ to spend my energy on [traffic] recovery,'' said Florian Preuss, Etihad Airways manager for Thailand. ''It is for the Thais to deal with the situation.''
British Airways seems to be thinking along the same lines. Though the siege cost it around 50-60 million baht in lost revenue and other expenses in evacuating some 3,000 stranded passengers out of the capital at the time of the airport crisis, Kevin McQuillan, BA's manager for Thailand, said that suing the PAD was not on the airline's agenda.
Tassapon Bijleveld, chief executive of the no-frills carrier Thai AirAsia, was more vocal, saying, ''It is useless to talk about the the PAD and a lawsuit.''
''This is a political issue, something you cannot really make accountable and make them compensate for the losses incurred to us. It is not worth our time, legal fees and energy,'' he said.
The airport shutdown caused Thai AirAsia to miss its 2008 passenger target, set earlier at 4.5 million, by about 300,000 passengers, and revenue projection by a considerable margin.
''We're looking forward, not backward,'' Oman Air chief executive Peter Hill responded when asked whether his airline was pondering any legal action against the PAD.
''We have to deal with this sort of issues all over the world _ the tsunami, Sars, 9/11, the attack on Colombo airport that destroyed half of Sri Lanka Airlines' fleet in 2001.
''The situation in Thailand is something we call crisis management. You have to work around it, try not to get embroiled in these political issues,'' the veteran British airline executive said.
An executive for Singapore Airlines' Bangkok office said it had not received any indication from its head office to press charges against the PAD.
Thai Airports Ground Services Co (Tags) chief executive Ladya Uriya said the company had looked into the laws and concluded that it was a waste of time to take the the PAD to court, though the closure caused its revenue to drop by 30% last year. ''We would rather rebuild our business,'' he added.
Only Thai Airways International (THAI) and Airports of Thailand Plc have made known their legal intention.
THAI, which bore the brunt of the airport closure with 20 billion baht in damages, has already resolved to hold the PAD leaders accountable with a lawsuit for compensation equivalent to the disruption costs and future lost revenue.
AoT, in turn, will make the the PAD liable for its action that cost more than 50 million baht for each day of the closure."

And finally just to illustrate how dead serious the present Government is about restoring tourist confidence and ensuring that this will never happen again -



"Anti-airport seizure draft is some joke!

By: Boonsong KositchotethanaPublished: 25/02/2009 at 12:00 AMNewspaper section: News Is the Abhisit Vejjajiva administration really serious about preventing the airports from being seized again, as the prime minister himself strongly pledged to the world recently?



Probably not - if one looks at how the authorities are pursuing charges against leaders of the People's Alliance for Democracy (PAD) for their siege of Suvarnabhumi and Don Mueang airports during Nov 25-Dec 4 last year.
Investigations into the case have been painfully slow, as police remain confused, intentionally or not, as to what charges they would press against the PAD leaders, despite the abundant evidence.
The draft bill on anti-airport seizure which was recently approved by the Cabinet appears to be more proof of the lack of any serious intention to keep airports off-limits to political rallies.
The draft contains a ridiculously light penalty for any attempt to seize Suvarnabhumi Airport, the heart and soul of Thailand's air transport hub around which much of the Thai economy is built. It is highly offending that the proposed punishment for a crime that causes the national economy a massive heart attack and ruins the country's international image carries a measly fine of between 500 and 10,000 baht!
Why on earth is serious criminal punishment conspicuously absent from the draft? The fine print in the five-step measures laid down recently by a Transport Ministry-appointed committee set up to restore Thailand's air transportation, is equally laughable and a reflection of the intent.
First, it calls for the dispatch of officials to negotiate with protesters before they reach the airport. Second, if the demonstration shows signs of being prolonged, the Airports of Thailand Plc (AoT) should set aside an area within Suvarnabhumi Airport but outside the passenger terminal, for them to congregate. Third, find spare channels for passengers to enter and exit the airport.
Fourth, step up security checks along passages to the airside, including aprons and air traffic control tower. Fifth, the AoT needs to conduct anti-airport seizure drills every year.
In the event that demonstrators are in great numbers, the AoT should coordinate with the police and military for support in crowd control.
Both the draft law and the measures are clearly superficial and aimed only at pacifying anxious members of the public and the international community that there would not be a recurrence of airport seizures.
It also raises the suspicion that the Abhisit government came up with such a draft bill only to dissuade the red-shirted opposition protesters from following in the footsteps of the yellow-shirted dissidents by taking over Bangkok's airports and creating another disaster for the whole country.
Unfortunately, the contents of the draft law and the five-step action plan are undoubtedly ineffective, if not openly inviting demonstrators to hold the country hostage to fulfil their political ambitions.
One question springs to mind: Is the anti-airport seizure draft bill and action plan needed in the first place?
There exists a penal code (sections 135/1 and 132/2 amended in 2003) which classifies the seizure of airports as an act of terrorism, a crime subject to a fine of between 60,000 and 1 million baht, as well as the death penalty.
The penalty is harsh enough to deter any more crime - but only if the authorities enforce the rule of law.
In fact, the five-step action plan was "practised" by the AoT during the last airport blockage, and it proved completely futile. When the AoT sent out an SOS to army Commander-in-Chief Gen Anupong Paojinda and the National Police Commission to dispatch reinforcements as the situation at Suvarnabhumi was getting out of hand, it simply fell on deaf ears. The previous government, the PAD and the armed forces were too busy playing their own game and were insincere about unlocking the political stalemate that was devastating the country.
The Abhisit government needs to do a better job to convince us that it is dead serious about preventing history from repeating itself, and must indiscriminately allow existing laws to take their course.
Thailand has paid dearly for the PAD's senseless and embarrassing action: 210 billion baht in losses and causing the country's GDP to contract for the first time in nearly a decade in the fourth quarter to minus 4.3% year-on-year.
The blockade left some 350,000 visitors stranded and prevented 3.4 million tourists from visiting Thailand, severely denting the kingdom's tourist-friendly image.
Boonsong Kositchotethana is Deputy Assignment Editor (Business), Bangkok Post."




So the people having cost Thailand and the Thai people, losses of over 200 billion Baht will walk away with fines from 500 - 10.000 Baht, seems real fair don't you think that will definitely give them a fright they will never forget.

Some one have been suggesting that millions of Thais can just go back to the rural areas and live of the land, and thus this Country would not be hurt to much by the crisis, but apparently the rice farmers are struggling all ready so I'm not sure how this is going to work out-



"Farmers threaten to block highways

Published: 2/03/2009 at 02:24 PM Farmers nationwide have threatened to block four major highways if the government sets the guarranteed buying price for rice at only 10,000 baht per tonne.

Wichian Puanglamjiak, vice-president of the Thai Farmers Association, said on Monday the government earlier rejected the association’s request to extend the 2008-09 rice crop mortgage scheme for one month,
The government argued that farmers could instead sell their rice in the 2009-10 cycle, that starts on March 16.
However, the association had learned the government would reduce the guaranteed price for rice from 12,000 baht per tonne to 10,000 baht. Rice farmers throughout the country were frustrated by the decision.
Registered members of the farmers association would protest by blocking four national highways if the government does not reconsider the new price.

If the government remained ambivalent about the problem of low prices for rice, the farmers would then move their protest into Bangkok, Mr Wichian said."




It is an arrogant and unbelievable unintelligent idea to believe that millions of People accustomed to life in the big city's, the higher paid jobs and reasonable comforts, the ability to feed, buy books and school uniforms for their children, would be accepting to have to go back to rural areas and scrape a meagre existence on the limit of starvation under middle-age like primitive conditions without violent protests breaking out.
Recently the millitary communist dictators in Laos aired the same thoughts, that was not suprising you would expect total indifference for the people's living conditions from them, and that some Thais high up are just as stupid is after all that has happend lately not to surprising either.

"Signs of improvement lead to launch of new projects"

The top 10 property developers in the Thai market are preparing to launch new residential projects worth more than Bt30 billion as they glimpse what some believe are the first signs of improvement in home-buyer confidence.

A survey by The Nation last week found that Sansiri will launch 11 new residential projects with a market value of Bt15 billion. One has been launched already and another 10 will follow this week. Preuksa Real Estate plans to launch eight new residential projects worth Bt5.9 billion this month, LPN Development will launch the second phase of a condominium project at Ram-Indra-Laksi worth Bt850 million this week, and Land & Houses plans to launch three new residential projects worth Bt3 billion this month.

Asian Property Development will launch only one project worth Bt660 million this month, but that is the first part of an 11-project campaign for later in the year that will have an ultimate value of Bt17.7 billion. Supalai launched its first condominium project, with a market value of Bt1.7 billion, last month.

Other property firms that are not listed on the Stock Exchange of Thailand are also joining the rash of residential project launches with developments collectively worth more than Bt5 billion. These include Pace Development, which launched a luxury condominium project, Saladaeng Residences, worth Bt2.5 billion, last month. Four Pattana will also launch Baan Busaba, worth Bt200 million, this week.

Sansiri's chairman Apichart Chutrakul said that although Thailand's economy had slumped following the global downturn, his company believed that demand still existed for residential projects priced between Bt3 million and more than Bt5 million.

"I think this is a good time for home-buyers to be buying a residence - when most property developers have launched marketing campaigns to boost their sales in the first quarter," he said.

Sansiri is aiming for presales of residential properties worth Bt5.5 billion before the end of this month, following presale bookings of residences worth Bt2.5 billion after the January launch of its luxury condominium, Quattro. It will boost its chances of meeting the target by launching Living in Style 2009, at Siam Paragon this weekend.

Supalai's deputy managing director Atip Bichanond said his company believed that despite the economic slowdown, real demand for residential projects priced between Bt1 million and Bt3 million would continue to grow if the projects were designed to meet customers' needs.

"We've seen good signs in the first two months of this year. The number of visitors to our residential projects has increased about 10 per cent since the last quarter of last year, when the number of visitors fell more than 50 per cent below normal. As a result, we believe that when we launch new projects at this time, we will create a feeling of confidence among our customers and in the overall property market, that things are better than in the last quarter of last year," he said.

It's a feeling with which others in the industry concur. Preuksa Real Estate's chief executive and managing director Thongma Vijitpongpun said that in the first two months of 2009, the property market had shown significant recovery from the fourth quarter of 2008, thanks to the government's stimulus measures.

Thongma said his company had recorded presales of properties worth Bt955 million in January 2009, up by 19 per cent over the value of Bt800 million in December. The presales pace increased last month, with customers signing up for properties worth Bt1.3 billion, a 38-per-cent increase over January. This shows that home-buyers' confidence is recovering, Thongma said.

"In December, we had 2,500 visitors to our projects, and between 22 and 23 per cent of them made a decision to buy. Now, we're getting between 3,000 and 3,500 visitors to our projects per month, and between 25 and 26 per cent of them are deciding to buy. This is a good sign for the property market after the hard time in December last year," he said.

Pace Development's chief executive Sorapot Techakraisri said that although the economy would grow only slightly this year, the company believed it was a good time for investors to be getting into residential property.

"If investors save their money in the bank or invest it on the Stock Exchange of Thailand, they will get returns on investment lower than 5 per cent. But when they invest in property, they will get an asset that will generate an annual return on investment of between 7 and 10 per cent. This is better than other investment options," he said. Saladaeng Residences is the company's second condominium project. The first was successfully developed on Sukhumvit 44/1 in 2004.

According to a survey by the Agency for Real Estate Affairs (Area), there were 14 new residential projects launched in January with a total market value of Bt17.25 billion. That showed an increase of 113 per cent over the Bt9-billion value of new projects launched in December.

The research showed that new projects launched in January focused on the middle-income market, with prices between Bt2 million and Bt3 million per unit.

source

Good luck with all of that.