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LAXintl
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Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 8:46 pm

Turns out TG has been working to unload its fleet of 4 grounded A340-500 aircraft.

A potential sale was cancelled by TG, when the highest bid purchase price received was $23mil from a Saudi Arabia VIP client versus the $66.9mil book value that TG was seeking for the frame.

The bid which was made via a UK company feel far short of TG's depreciated book value on the aircraft. The UK company which lodged a $2.5mil deposit on the purchase says the market realities do not fit TGs valuation criteria.

Story:
http://www.bangkokpost.com/news/loca...i-plane-stall-won-t-hurt-relations

=

TG is crazy if they believe they will ever receive anything close to the book value on these frames.   
At the end of the day, they need to write off the loss, and get the frames out of their hands before they lose even more value.
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PlaneAdmirer
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 8:53 pm

Sounds like Thai didn't get the same deal from Airbus on A340's that others did. I am sure that I read on here that other airlines have repurchase agreements from Airbus.
 
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KarelXWB
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 8:57 pm

Quoting LAXintl (Thread starter):
TG is crazy if they believe they will ever receive anything close to the book value on these frames.

I agree, they should have taken the bid.

Quoting PlaneAdmirer (Reply 1):
Sounds like Thai didn't get the same deal from Airbus on A340's that others did. I am sure that I read on here that other airlines have repurchase agreements from Airbus.

Not a big surprise. Airbus was happy to take the A345's back from SQ because they have 70 A350s + another bunch of options on order, but Thai only has 4 A350s on order.
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cschleic
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 9:03 pm

What are the engines worth? Or are they too specific to the 340-500?
 
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mercure1
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 9:04 pm

$23mil is better than $0 with the aircraft sitting and rotting.

Anyhow, I suspect TG can benefit by writing off the loss and reducing future tax liability.

Also its not like they are making much money, so any revenue they can generate by disposing of needless assets is good.
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LAXintl
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 9:12 pm

This actually reminds me of Air India and its 777LRs. When TK looked at them 2-years ago, AI insisted on pricing which would cover their outstanding debt and payments which was quite different from the actual open market valuation for the types was.

Sounds like bureaucrats of the same stripes at AI & TG..  
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PlaneAdmirer
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 9:16 pm

I believe a sale would mean that Thai would have to book a loss of the same magnitude on the three remaining planes as well assuming that they are all similar. Accepting the offer would put a large question mark on the value Thai is putting on the remaining 340s on Thai's balance sheet. If so that means that Thai would be writing off a total of $43.9 million per plane or $175.6 million for all four. I have no idea if Thai earns that much money per year or what their balance sheet looks like in terms of taking a hit of that amount. Additionally, that kind of hit could cause covenant issues with respect to Thai's loans.
 
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 9:29 pm

At what point would it make more sense for TG to put these frames back into service ?
 
behramjee
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 9:29 pm

An A345 in an all Y class configuration can accommodate 375 passengers with a 32 inch seat pitch. TG may want to consider investing a small sum and converting these birds into an all Y class layout and then selling or leasing them to a charter company to operate high volume seasonal flights + JED/MED Hajj/Umrah flights or BKK-China/Japan/ICN charters etc. An all Y class A345 would in all likely hood be easier to sell versus being in the current TG configuration.


Quoting PlaneAdmirer (Reply 1):
Sounds like Thai didn't get the same deal from Airbus on A340's that others did. I am sure that I read on here that other airlines have repurchase agreements from Airbus.

surprising that they did not push Airbus hard enough for this !

Quoting KarelXWB (Reply 2):
Not a big surprise. Airbus was happy to take the A345's back from SQ because they have 70 A350s + another bunch of options on order, but Thai only has 4 A350s on order.

That should not matter. Airbus should see how many A330s/A340s and AB6s TG has ordered and operated in the past to value the good following that their aircraft has with a customer such as TG. In business at times, the supplier should be a bit more accommodating if it can guarantee itself a good chunk of meaningful future business. If I was at TG's helm and Airbus refused to offer me a buy back deal, I would in turn give them a cold shoulder and order as little of their wide bodies as possible for the forsee able future. Those 27 A333s, I would replace with B787-1000Xs and leave the 12 A359s order as is without further increasing !
 
cschleic
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 10:33 pm

Quoting PlaneAdmirer (Reply 6):
I believe a sale would mean that Thai would have to book a loss of the same magnitude on the three remaining planes as well assuming that they are all similar. Accepting the offer would put a large question mark on the value Thai is putting on the remaining 340s on Thai's balance sheet. If so that means that Thai would be writing off a total of $43.9 million per plane or $175.6 million for all four. I have no idea if Thai earns that much money per year or what their balance sheet looks like in terms of taking a hit of that amount. Additionally, that kind of hit could cause covenant issues with respect to Thai's loans.

This is a good point, the implications probably are larger than first glance, although I guess it could depend on Thai accounting rules (assuming the assets are domiciled in Thailand, if that's a factor in Thailand, etc....). Often, if loan agreements don't provide for adjustments for non-cash asset impairments in calculating covenants, company's get waiver/amendments, but that doesn't change the hit on net income. At the same time, aren't they majority owned by the Thai government? That adds another layer of interests in large $ charges.

Quoting behramjee (Reply 8):
That should not matter. Airbus should see how many A330s/A340s and AB6s TG has ordered and operated in the past to value the good following that their aircraft has with a customer such as TG. In business at times, the supplier should be a bit more accommodating if it can guarantee itself a good chunk of meaningful future business. If I was at TG's helm and Airbus refused to offer me a buy back deal, I would in turn give them a cold shoulder and order as little of their wide bodies as possible for the forsee able future.

They would have to focus on future orders, since Airbus won't care much about the past. Unfortunately, the likes of Emirates and Etihad and SQ and so on buy a lot more from Airbus, which doesn't help Thai.
 
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 11:03 pm

Unless something has happened recently, I believe AC's 2 A345s have been stored at Malta for quite a while, after their brief lease to TAM. They were (and presumably still are) the only A340s owned by AC. The A343s were leased.
 
PlanesNTrains
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 11:26 pm

Quoting behramjee (Reply 8):
That should not matter. Airbus should see how many A330s/A340s and AB6s TG has ordered and operated in the past to value the good following that their aircraft has with a customer such as TG. In business at times, the supplier should be a bit more accommodating if it can guarantee itself a good chunk of meaningful future business. If I was at TG's helm and Airbus refused to offer me a buy back deal, I would in turn give them a cold shoulder and order as little of their wide bodies as possible for the forsee able future. Those 27 A333s, I would replace with B787-1000Xs and leave the 12 A359s order as is without further increasing !

If you buy an aircraft and then get buyers remorse down the line, it shouldn't be the manufacturers problem. Whining about it and threatening to take your business elsewhere is pretty lame, if you ask me. If Thai thinks they can come out ahead by telling Airbus to pound sand in the future, fine. However, how many aircraft would Airbus have to sell to TG to make up in profit what they lost in taking back the A345's?

I'm with the other poster. Fill 'em with seats and make a living hustling people to low-yield, high-volume destinations.

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LAXintl
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 11:43 pm

Sooner or later TG will have to take the accounting charge on the frames.
Atleast today, there is someone willing to pay something for them. Next month, or next year they might be total orphans with zero interest.
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bennett123
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 11:47 pm

Also, if they rule out A, then B will have them over a barrel.
 
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RE: Thai Airways A340-500 Sale Fails

Thu Sep 19, 2013 11:50 pm

Lots of people lost lots of money on the A345 and A346, including Airbus. Beauty does not mean it's capable....
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 12:16 am

Quoting LAXintl (Reply 5):
This actually reminds me of Air India and its 777LRs. When TK looked at them 2-years ago, AI insisted on pricing which would cover their outstanding debt and payments which was quite different from the actual open market valuation for the types was

Everyone knows, if you're selling something used like a plane or a car, you ask for what you want, and you take what you can haggle out.

IMO, TG passed up an opportunity for some needed cash. I don't know Thai law, but usually there is a way a company can write off losses on assets, or at least a good portion of the loss.
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 12:58 am

Delta should pick up all the A345s on the market for a good deal on international expansion   
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 2:23 am

Ah, another A345 thread filled with detraction and conjecture.

TG has the wrong strategy here. There is a 'new' A345 listed at $75M, book value is ~$45M. I would have accepted sale at above $30M. The gap from 23-30 isn't insurmountable; I suspect TG's negotiators aren't up to snuff.

I say wrong strategy because at this low value you can fly the plane, make $, and get some use out of it. Do a partial reconfig if you have to, and run it on A/B-market routes up to say 4000nm. I'd have to look at their route network closer, but depending on yields this could be more beneficial than having the a/c sit there.

Either this, or order some Airbuses and trade them in as part of the deal.
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 2:39 am

Quoting Pellegrine (Reply 17):
TG has the wrong strategy here. There is a 'new' A345 listed at $75M, book value is ~$45M. I would have accepted sale at above $30M. The gap from 23-30 isn't insurmountable; I suspect TG's negotiators aren't up to snuff.

Unfortunately with so many used A345s available or about to be available, TG really is not in a good position to negotiate.
 
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 2:39 am

Given that Thailand has become quite good at brokering the sales of western-built airplanes to Iran to circumvent existing trade embargoes ... perhaps Iran can be a customer for Thai's A340-500.

The longer these sit on the very hot (and right now very wet) ramp at Don Mueang Airport, the worse their condition will be. And it will get worse if Thai begins to cannibalise any of them for parts that could be used on the A340-600s.

A year ago when I visited Don Mueang Airport, the A345s still looked reasonably good ... sitting right alongside the A340-300s in Chaba Air livery.

Thai is caught between a very uncomfortable rock and a very hard place ... if it had only one A345 to sell, the offered price would have made enough sense. But with three more available, selling this first one at this price automatically depreciates the value of the remaining three.

I fully agree that Thai should consider an all-economy configuration for the A340-500 and use it on regional routes where there is tremendous demand and there is no need to load up with fuel for very longhaul operations. It is after all already using the A340-600 on short routes of 2 hrs 20 mins to Singapore every afternoon. It surely is better than having the A345 sit on the ramp every day, deteriorating and still bleeding money (parking charges, insurance and general upkeep.

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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 3:20 am

Quoting Polot (Reply 18):

Yes it's certainly a buyers' market. That's why I'd look into options to remove my frames from the equation. TG simply parked them, EK didn't do that.
We fly JETS, we don't fly donkeys. Citizenship/Residence::: Washington DC, US; Vaud, CH; Providenciales, TCI (hence my avi)
 
AY-MD11
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 6:30 am

Just reconfigure them to normal seating like the A346 and put them back to service. Open new route and put them on use. I give a hint to Thai open new route to Helsinki or Russia and you'll fill them up nicely. 
 
bill142
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 6:34 am

Qantas should buy them so they can retired the remaining 747s and still operate to JNB and SCL without ETOPS restrictions. It would also pave the way for a 777 order to fill the remaining gaps.
 
AR385
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 6:53 am

Quoting PlanesNTrains (Reply 11):
If you buy an aircraft and then get buyers remorse down the line, it shouldn't be the manufacturers problem. Whining about it and threatening to take your business elsewhere is pretty lame, if you ask me.

No, it´s not lame. It´s what the market will accept. If the market is selling only on what you call "buyers remorse" deals then you have to provide one. You´d be surprised what can come out of a good negotiation.

Just as TG is finding out, the market, at the same time, is also telling them they can´t get what they are (assuming it is correct) asking for those frames.

People here buy jewelry for their wives, fianceés, lovers, current bed wrap, etc. and they say "it´s really an investment." And it´s just not. When you are in need of selling a jewel, you probably won´t get what would make it a "good investment."

Quoting Pellegrine (Reply 17):
TG has the wrong strategy here. There is a 'new' A345 listed at $75M, book value is ~$45M. I would have accepted sale at above $30M. The gap from 23-30 isn't insurmountable; I suspect TG's negotiators aren't up to snuff.

That and the covenant thingie is probably what is going on.
 
TC957
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 6:54 am

I'm a bit surprised Philippine Airlines wern't looking at them, and getting much older ex-IB A343's instead. Also, how come they aren't flown to VCV or MHV to be properly looked after in dry storage conditions rather than being left out in BKK's hot and wet climate ? Does HS-TLD still do Thai Govt flights ?
 
bthebest
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 7:14 am

Quoting cschleic (Reply 3):
What are the engines worth? Or are they too specific to the 340-500?

Pretty much the same as any other part of the aircraft - Trent 500s are exculsive to A345/6. I don't know what the spares market for the A345/6 is like, but I can imagine its dwindling by the day.
 
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 7:16 am

Because A343 has better economics than the 345, it's a lot lighter, covers majority of the city pairs with a really decent payload and pax.
Many suggest here TG should convert the seating to all Y and fly them low yield shorter routes but flying a very heavy and expensive to operate type, even at a lighter TOW, what kind of a cost/benefit ratio that's gonna provide? I'm sure an airline of TG's scale also considered this option as well as other scenarios. Time will tell, I really hate to see these beautiful birds getting no use and sitting in less than perfect conditions. I wish I could afford one.
 
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 7:53 am

Quoting AR385 (Reply 23):

No, it´s not lame. It´s what the market will accept. If the market is selling only on what you call "buyers remorse" deals then you have to provide one. You´d be surprised what can come out of a good negotiation.

I'm not disagreeing with that premise. I'm disagreeing with the "Do X for me or I'll take my business elsewhere" response. It's perhaps too subtle of a distrinction, but to me the former impies some level of leverage that the two can negotiate on, while the latter implies desperation and childish demands with little real benefit to come to Airbus.

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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 8:10 am

Quoting mercure1 (Reply 4):
$23mil is better than $0 with the aircraft sitting and rotting.

Anyhow, I suspect TG can benefit by writing off the loss and reducing future tax liability.

Also its not like they are making much money, so any revenue they can generate by disposing of needless assets is good.
Quoting RWA380 (Reply 15):
IMO, TG passed up an opportunity for some needed cash. I don't know Thai law, but usually there is a way a company can write off losses on assets, or at least a good portion of the loss.

How much are these frames encumbered to TG's financiers. It could be the case selling them at a book value loss (and especially of this magnitude) could require them to re-finance / encumber other aircraft which may not be to the benefit of TG going forward.

For argument sake if the aircraft are encumbered for $50 mil per frame ($200 mil Total) than a sale of $92 mil (for four frames) would mean TG would have to come up with an additional $108 mil. to keep everything equal.

Now if the aircraft are costing them $25 mil in finance costs per year, than they have a bit over four years before selling the aircraft makes sense. I am not sure of too many companies that would like to give $108 mil. now instead of over four years.
 
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 9:15 am

Quoting PlaneAdmirer (Reply 6):
I believe a sale would mean that Thai would have to book a loss of the same magnitude on the three remaining planes as well assuming that they are all similar. Accepting the offer would put a large question mark on the value Thai is putting on the remaining 340s on Thai's balance sheet. If so that means that Thai would be writing off a total of $43.9 million per plane or $175.6 million for all four

Even if the sale doesn't take place, accouting rules state that these assets need to be written down to the lower of cost and open market value - ie what someone is willing to pay for them. As stated in earlier posts I don't know what accounting standards TG uses but its hard to see any standard that lets you hold assets at inflated values.

Think they should have taken the money!

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United Airline
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 9:26 am

So what will happen to them? Will they restart BKK-LAX or BKK-JFK? Perhaps they can reuse them? Any possible new routes?

[Edited 2013-09-20 02:30:12]
 
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 9:46 am

Quoting aireuropeuk733 (Reply 29):
Even if the sale doesn't take place, accouting rules state that these assets need to be written down to the lower of cost and open market value - ie what someone is willing to pay for them. As stated in earlier posts I don't know what accounting standards TG uses but its hard to see any standard that lets you hold assets at inflated values.

Think they should have taken the money!

Please remember they are majority state owned...

Quoting United Airline (Reply 30):
Will they restart BKK-LAX or BKK-JFK?

I really liked these routes...I'm an ULH fan, but they were foolhardy. TG is no SQ, and BKK doesn't have as big of a business market that SIN does.
We fly JETS, we don't fly donkeys. Citizenship/Residence::: Washington DC, US; Vaud, CH; Providenciales, TCI (hence my avi)
 
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RyanairGuru
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 10:41 am

Quoting Bill142 (Reply 22):
operate to JNB and SCL without ETOPS restrictions

I've thought that in the past, not to necessarily replace all the 744s right now, but to keep small four-holers for JNB and SCL. Commonality with the 330 fleet shouldn't make it too insurmountable cost wise, other than the actual cost of flying the things.

Of course we all know that will never happen, and anyway 343s would probably have both lower acquisition costs and lower operating costs, and can comfortably serve both routes.
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lightsaber
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 1:33 pm

These planes weren't worth the book value in 2010! (See post #3)
Aircraft Values, And Lease Pricing - Spring 2013 (by LAXintl May 14 2013 in Civil Aviation)

Now per post #23 of that other thread, these A345s should have been worth a bit more. Which raises questions of condition and the market. The market for A340s is dropping fast. Aircraft make their profit on the difference between operating costs and revenue. That difference isn't as great as it used to be, so there just might be zero markets for the A345.

Anyone who wants an A345 can pick up one cheap. From EK, EY, and Airbus (don't they have the ex-SQ birds?). TG should not be holding out.

Quoting LAXintl (Reply 5):

This actually reminds me of Air India and its 777LRs. When TK looked at them 2-years ago, AI insisted on pricing which would cover their outstanding debt and payments which was quite different from the actual open market valuation for the types was.

   With 787 and soon A350 deliveries, these planes will not be appreciating.

When used 787s/A350s become available, these planes will only be worth scrap. So in about 7 years, perhaps $7M per frame (my best SWAG).

Quoting PlaneAdmirer (Reply 6):
Thai would be writing off a total of $43.9 million per plane or $175.6 million for all four. I have no idea if Thai earns that much money per year or what their balance sheet looks like in terms of taking a hit of that amount. Additionally, that kind of hit could cause covenant issues with respect to Thai's loans.

That write down has to occur at some time. These planes will never be worth their book value.

Quoting boeingbus (Reply 14):

Lots of people lost lots of money on the A345 and A346, including Airbus. Beauty does not mean it's capable....

  

Quoting Pellegrine (Reply 17):
I say wrong strategy because at this low value you can fly the plane, make $,

I'd like to see the math that says they could make money. Do not forget to put the A345 up against the A333, 77W, and 787. Last I looked, flying an A345 would lose on the order of $1.5M per month. So this offer was a write down of 2 years... The only value for A345s is the VIP market. With 787 deliveries accelerating, the 'wide body shortage' is coming to an end.

Quoting Pellegrine (Reply 20):
TG simply parked them, EK didn't do that.

EK has parked a number. Not all, but it looks as if EK will park the A345s as soon as they need any investment (heavy maintenance). EK is also short on aircraft. So by using the A345 during high RASM times, they minimize the losses.

And three years ago the utilization rate was dropping and low for an ULH aircraft. Does TG have a high RASM option to minimize losses? I'm sure after depreciation EK is losing money on ever A345 flight, just less money than grounding them quickly. But they are being removed from the fleet...

Link showing EK has two A345s available now, not flying:
Aircraft Sale By Emirates (by bennett123 Jul 24 2013 in Civil Aviation)

Link showing EK opertions in 2010:
Emirates At DXB - Ultimate Operational Analysis (by HB-IWC Sep 27 2010 in Civil Aviation)

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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 1:50 pm

Quoting KarelXWB (Reply 2):
Not a big surprise. Airbus was happy to take the A345's back from SQ because they have 70 A350s + another bunch of options on order, but Thai only has 4 A350s on order.

Yeah, Boeing does the same on the old 744s. 60 million is basically crazy for these frames. Its a wonderful and capable plane but in other threads they were saying A34x's were down to 10 million (maybe an exaggeration).

Quoting runway23 (Reply 7):
At what point would it make more sense for TG to put these frames back into service ?

None. I think that's part of the problem. I am sure you could open a new route or lease it if you really hustled.

Quoting behramjee (Reply 8):
An A345 in an all Y class configuration can accommodate 375 passengers with a 32 inch seat pitch. TG may want to consider investing a small sum and converting these birds into an all Y class layout and then selling or leasing them to a charter company to operate high volume seasonal flight

This to me is the obvious solution with the A340 series. They are still great planes with plenty of life. If its just a CASM/Fuel issue, pack em like sardines. Asians tend to be a little smaller anyways!
 
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 3:25 pm

Quoting PlanesNTrains (Reply 11):
If you buy an aircraft and then get buyers remorse down the line, it shouldn't be the manufacturers problem. Whining about it and threatening to take your business elsewhere is pretty lame, if you ask me. If Thai thinks they can come out ahead by telling Airbus to pound sand in the future, fine. However, how many aircraft would Airbus have to sell to TG to make up in profit what they lost in taking back the A345's?

I am inclined to agree. Nobody twisted TG's arm to buy the planes--they were purchased in anticipation of what turned out to be a failed marketing strategy. Sometimes you just have to take your lumps and move on. Personally I would take what I could get for them in today's market as VIP or governmental aircraft.

Quoting aviasian (Reply 19):
Given that Thailand has become quite good at brokering the sales of western-built airplanes to Iran to circumvent existing trade embargoes ... perhaps Iran can be a customer for Thai's A340-500.

Wow--never heard that. I had wondered how Iranian carriers were getting around the embargo. I feel a new thread coming on here.
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PlaneAdmirer
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 3:31 pm

Quoting aireuropeuk733 (Reply 29):
Even if the sale doesn't take place, accouting rules state that these assets need to be written down to the lower of cost and open market value - ie what someone is willing to pay for them.

Not necessarily correct. While I don't think the offer made was a lowball offer, if someone makes a lowball offer for an asset there is no reason to change book valuation to reflect that.

Btw, I am supportive of the sale. I pointed out the accounting issues related to the sale as a reason for them to say no, not as business advice.
 
aireuropeuk733
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 4:01 pm

Quoting PlaneAdmirer (Reply 36):
if someone makes a lowball offer for an asset there is no reason to change book valuation to reflect that.

There is if that offer is reflective of the market - accounting standards are very clear.

Whilst I'm not suggesting that they should be we written down in value based upon one ofer but if that was the highest offer they have received then it could be construed as a market indicator, and if not held as 'stock' then an impairment review needs to be undertaken to state the assets at fair value.

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Devilfish
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 5:32 pm

Quoting TC957 (Reply 24):
I'm a bit surprised Philippine Airlines wern't looking at them, and getting much older ex-IB A343's instead.

PR management is already accused of incompetence on these boards. Surely they wouldn't want stupidity added to the charge    .

Quoting Pellegrine (Reply 31):
Please remember they are majority state owned...
Quoting lightsaber (Reply 33):
The only value for A345s is the VIP market.

If the Government is not averse to used airframes for their leaders, then it's "possible" for one to be seconded to their VIP fleet at close to "acceptable" book value (accounting principles duly noted).


Quoting PlaneAdmirer (Reply 6):
I believe a sale would mean that Thai would have to book a loss of the same magnitude on the three remaining planes as well assuming that they are all similar. Accepting the offer would put a large question mark on the value Thai is putting on the remaining 340s on Thai's balance sheet.
Quoting DTWPurserBoy (Reply 35):
Sometimes you just have to take your lumps and move on. Personally I would take what I could get for them in today's market as VIP or governmental aircraft.

Assuming they accepted the Saudi offer and kept one for their own...any other likely VIP buyers?

Reply 19 put forward a possibility, but it's not without its complications.
"Everyone is entitled to my opinion." - Garfield
 
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lightsaber
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 7:41 pm

Everyone should Google "resale value A340-500" and go to the 3rd link (s/b a WSJ article which won't link here):
"Airplane-valuation specialists say big A340s are now valued at below $20 million.

If true, this wasn't a lowball. It is very reflective of the "big" A340 market.



"More than 10 European banks are pressing Airbus to compensate them for losses on A340 deals or do more to find homes for unwanted aircraft, according to people close to the talks."

"Airbus is financially exposed to A340s largely through guarantees it gave customers on the future value of its planes. If the resale price of the planes falls below certain thresholds, Airbus may need to make up the difference.

For EK: ""It's a sad case," says Emirates President Tim Clark. Airbus must take back Emirates's 10 big A340s because it is "locked in" to the planes' financing, he said."

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Flighty
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 7:54 pm

Quoting lightsaber (Reply 39):
If true, this wasn't a lowball. It is very reflective of the "big" A340 market.

If Thai refuses to sell because of emotional reasons, that is their own business.

"Failure to sell" in housing real estate is 99% the same thing. Nothing fails to sell IF you are willing to sell for a market price. If unwilling, well, then it wasn't really for sale at all, was it.

And for that matter, "failure to hire workers" is also fakery. Business leaders say they "need more" workers. Have they offered market wages? Evidently not, so they aren't really "actual jobs" available. Only wishful thinking.

Regardless, I too, have aero-appreciation feelings for the glorious Thai A345.

[Edited 2013-09-20 12:58:08]
 
trex8
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RE: Thai Airways A340-500 Sale Fails

Fri Sep 20, 2013 8:01 pm

Quoting Devilfish (Reply 38):
Quoting Pellegrine (Reply 31):
Please remember they are majority state owned...
Quoting lightsaber (Reply 33):
The only value for A345s is the VIP market.

If the Government is not averse to used airframes for their leaders, then it's "possible" for one to be seconded to their VIP fleet at close to "acceptable" book value (accounting principles duly noted).

Well they have an aircraft carrier which is pretty pointless for anything except as a royal yacht (especially when they initially didn't even budget for mx and running costs for the Harriers they also purchased and those have even been retired now!) so why not a VIP A345. There's obviously lots of baht they can throw around and use.
 
DeltaB717
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RE: Thai Airways A340-500 Sale Fails

Sun Sep 22, 2013 11:57 pm

Where is AR in all this? Why are they not all over this model?
 
TC957
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RE: Thai Airways A340-500 Sale Fails

Mon Sep 23, 2013 8:44 am

Good point - seems to me to one airline that could make good use of A345's. But what happened to their intended purchase of the 4 QR A346's ??
 
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Stitch
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RE: Thai Airways A340-500 Sale Fails

Mon Sep 23, 2013 2:19 pm

The Governments of India and Thailand should sell each other AI's 777-200LRs and TG's A340-500s. That way they can each get the price they want for their respective frames.

TG might actually make BKK-LAX/JFK work with a 777-200LR and AI can park the A340-500 at BOM to spite Kingfisher Airlines (who defaulted on their five-frame A340-500 order).

[Edited 2013-09-23 07:20:00]
 
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KarelXWB
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RE: Thai Airways A340-500 Sale Fails

Mon Sep 23, 2013 2:23 pm

Here's Emirates' plan for the remaining A345 fleet:

http://www.flightglobal.com/news/art...-parting-out-its-a340-500s-390832/

Quote:
Emirates has retired two of its 10 Airbus A340-500s, and is breaking one for spares, as sustained high fuel prices take their toll on operations of the four-engined aircraft.

“We’ve taken a big hit to retire them, but [their poor economics means] there’s no point in flying them,” says Clark. “They were designed in the late 1990s with fuel at $25-30. They fell over at $60 and at $120 they haven’t got a hope in hell.”

Clark says that Emirates is looking to accelerate the phase-out of its remaining eight A340-500s, and if it cannot find any buyers, “they’re going to the knacker’s yard”.

“When we bought it, it was the only aeroplane that could fly nonstop to the west coast of the USA or the east coast of Australia,” says Clark. “Unfortunately for Airbus, nobody foresaw fuel doing what it did.”


The knacker’s yard, lol.

[Edited 2013-09-23 07:27:38]
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skipness1E
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RE: Thai Airways A340-500 Sale Fails

Mon Sep 23, 2013 2:33 pm

Any photos of the two stored at Dubai? Are they visible or hidden from view?
* edit It seems A6-ERF is off to RKT to be scrapped.

[Edited 2013-09-23 07:49:15]
 
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Stitch
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RE: Thai Airways A340-500 Sale Fails

Mon Sep 23, 2013 2:48 pm



Quoting KarelXWB (Reply 45):
Here's Emirates' plan for the remaining A345 fleet...

Three months ago, Mr. Clark noted that Airbus had to take back his 10 A340-500s. Has this subsequently changed and he now has to shift them himself?

Quote:
To woo hesitant customers, Airbus offered unusually generous guarantees and other terms that today are allowing airlines including Virgin, Singapore Airlines Ltd. and Dubai's Emirates Airline to walk away from dozens of the planes, executives at the airlines say. Airbus and its bankers face obligations of potentially tens of millions of dollars per plane.

"It's a sad case," says Emirates President Tim Clark. Airbus must take back Emirates's 10 big A340s because it is "locked in" to the planes' financing, he said.

The above is from the WSJ article "For Airbus and Bankers, Big A340s Pose Sizable Risks" by Daniel Michaels published on 12 June 2012.

[Edited 2013-09-23 07:48:36]
 
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KarelXWB
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RE: Thai Airways A340-500 Sale Fails

Mon Sep 23, 2013 3:02 pm

I guess he need a few spare parts. Or maybe he can get more money by selling the parts afterwards.

[Edited 2013-09-23 08:03:02]
What we leave behind is not as important as how we've lived.

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