TRIS Rating Co., Ltd. has informed about the new senior debentures of Thai Airways International PLC (THAI), which was assigned a "AA-" rating by TRIS Rating on 24 September 2004 that THAI has increased its value from Bt12,000 million to Bt15,000 million with due years in 2009, 2011 and 2014 respectively. TRIS Rating has still affirmed the "AA-" ratings to this THAI's new debentures and other THAI's debentures (THAI08OA and THAI10OA). The proceeds from this new debentures will be mainly used to refinance THAI's high-cost operating lease.
TRIS Rating said that the ratings continue to reflect THAI's capability to consistently deliver favorable profit, its dominant domestic market position, a strong presence in the international air routes in and out of Bangkok and the benefits from being a member of Star Alliance, the world's largest airline alliance. The ratings are enhanced by THAI's status as the national flag carrier and the Thai government as its major shareholder. These strengths are partially offset by intense competition due to excess capacity in the global airline industry, higher risk of jet fuel price, and its high debt burden. Although THAI's plans for fleet expansion and product renovation will enhance its competitive position, it must make large capital expenditures which will be partly funded by additional borrowing.
The "stable" outlook of THAI is still based on the expectation that it will continue to generate favorable performance due to continued strong demand for air transportation and support from its major shareholder. However, it may face a more difficult competitive environment and high fuel cost, which can be partly passed on to customers as a fuel surcharge, TRIS Rating said. -- End
Thai Airways International PLC (THAI) Company Rating: Affirmed at AA- Issue Ratings: THAI08OA: Bt5,500 million senior debentures due 2008 Affirmed at AA- THAI10OA: Bt4,500 million senior debentures due 2010 Affirmed at AA- THAI#3: Up to Bt15,000 million senior debentures due 2009, 2011, 2014 AA- Rating Outlook: Stable
TRIS Rating said that the ratings continue to reflect THAI's capability to consistently deliver favorable profit, its dominant domestic market position, a strong presence in the international air routes in and out of Bangkok and the benefits from being a member of Star Alliance, the world's largest airline alliance. The ratings are enhanced by THAI's status as the national flag carrier and the Thai government as its major shareholder. These strengths are partially offset by intense competition due to excess capacity in the global airline industry, higher risk of jet fuel price, and its high debt burden. Although THAI's plans for fleet expansion and product renovation will enhance its competitive position, it must make large capital expenditures which will be partly funded by additional borrowing.
The "stable" outlook of THAI is still based on the expectation that it will continue to generate favorable performance due to continued strong demand for air transportation and support from its major shareholder. However, it may face a more difficult competitive environment and high fuel cost, which can be partly passed on to customers as a fuel surcharge, TRIS Rating said. -- End
Thai Airways International PLC (THAI) Company Rating: Affirmed at AA- Issue Ratings: THAI08OA: Bt5,500 million senior debentures due 2008 Affirmed at AA- THAI10OA: Bt4,500 million senior debentures due 2010 Affirmed at AA- THAI#3: Up to Bt15,000 million senior debentures due 2009, 2011, 2014 AA- Rating Outlook: Stable