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March 1, 2009

High fuel price blamed for Thai Airways’ huge loss in 2008

Thailand’s 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, AFP quoted the company as saying.

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.

Economic woes to cut $5.3bn from Vietnam '09 budget
The economic slowdown and lower world crude oil prices could cut 90 trillion dong ($5.3 billion) from Vietnam's government income this year, Reuters quoted the government as saying.

In response, the government is seeking parliamentary approval to issue an additional 11.5 trillion dong worth of bonds this year to finance development projects, it said in a statement issued late on Thursday.

The statement did not provide any forecasts on prices or exports of crude oil, which was Vietnam's largest cash earner last year. This month the government estimated that crude dropped to second place behind textiles due to the fall in global prices.

January to February's crude oil exports fell 42.4 percent from a year ago to an estimated $958 million, the government said on Wednesday.

The statement said the government made the proposal on bond issues at Thursday's meeting of the Standing Committee of the National Assembly, or parliament, and that it won consensus from most of the delegates.

"While drafting the total investment using proceeds from government bonds, the government should consider national financial security with a permissible debt ratio, and controlling inflation," the statement quoted delegates as saying.

Final approval on bond issues would be decided in May at parliament's general session, it said.

The additional bond issues would bring Vietnam's total proceeds from government bond sales this year to 55 trillion dong, the statement said without giving further details.

Earlier this month the government said it planned to sell about 11.2 trillion dong worth of bonds to fund projects to boost economic growth this year.

The Finance Ministry will also sell dollar-denominated bonds on domestic markets this year to raise funds for key projects and to finance the state budget deficit, which has been projected at 4.8 percent of gross domestic product this year.
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