CHICAGO, Feb 26 (Reuters) - Thai Airways International Plc said on Wednesday its board had approved in principle a plan to buy seven Boeing 747-400 aircraft from bankrupt U.S. carrier United Airlines.
A United spokesman confirmed the airline was in negotiations with Thai Airways on the aircraft sale but would not speculate when the deal would be wrapped up.
Thai Airways Chairman Thanong Bidaya told reporters the deal would be about $702.2 million (30 billion baht) cheaper than buying new planes.
"The board's view is that the purchase is good for Thai Airways as it will help us save a lot," Thanong said.
A company official told Reuters the seven planes would cost about $330 million.
United, the No. 2 U.S. airline and a unit of Elk Grove Village, Illinois-based UAL Corp. (NYSE
:UAL - News), filed the largest bankruptcy in aviation history in December.
United is still in talks with aircraft financiers to decide which planes it will keep as the company reorganizes under bankruptcy protection. The carrier can either retain or cancel leases -- or renegotiate financing terms -- on certain of its planes with the bankruptcy court's approval.
United believes it can save possibly hundreds of millions of dollars by renegotiating the terms of leases and mortgages on 463 of the 567 jets in its fleet. The carrier has said so far that it plans to resume payments on 154 newer airplanes in its fleet and make $128 million in catch-up payments.
UAL executives have said the airline has already reached some temporary deals in which United is paying some sort of rent to financiers while permanent aircraft agreements are worked out. But executives have declined to say how many aircraft leases United plans to reject.
Air carriers have parked hundreds of aircraft since the Sept. 11 attacks because there is simply not enough demand to fill planes.
"These are airplanes that are surplus to our needs," UAL spokesman Jeff Green said. "Thai finds them useful for their fleet, so there you have a good match-up."
Green would not comment on whether United owned the planes outright or was leasing them. Of the 44 planes in United's 747-400 fleet, the airline owns 23 of them, he said.
Green also declined to say whether the seven planes were parked or were currently in service.
The purchase from United, which still needs Thai cabinet approval, is part of a Thai Airways plan to buy 12 planes over the next five years. Thai Airways is 93 percent owned by the Thai government.
Thanong said Thai Airways expected to receive three or four planes from United this year.
Thai Airways, which currently has 81 aircraft, has already bought two new Boeing 747-400 planes under its five-year plan. The two planes are scheduled for delivery in October.