THAI Announces Board Meeting Results

On 28 November 2001, Thai Airways International Public Company Limited held a Board of Directors’ Meeting, chaired by THAI’s Chairman and Acting President Mr. Virabongsa Ramangkura, with the following results:

1. Benefits to Board Members

Following the resolution of THAI’s Board of Directors’ Meeting 13/ 2001 on 26 October 2001, regarding the benefits allowed to board members, today, THAI’s Board of Directors has agreed to terminate the air ticket benefits granted to members’ spouse and children, in compliance with the Cabinet resolution, in accordance with the benefits and privileges for the Board of Directors of all state enterprises, as previously stated by the Committee for State Enterprise Policies as, “Benefits and privileges may be granted only to Board members, not including companions and family members.”

THAI’s Board members are allowed to issue no more than 10 return domestic and 10 return international complimentary air tickets per year, to travel on THAI aircraft to destinations served by THAI. The allocation is only effective during THAI’s Board of Directors’ term of office.

2. Appointment of THAI’s Legal Consultant

THAI’s Board has approved of the appointment of Mr. Wichian Wiriyaprasit, Attorney General, as THAI’s legal consultant, to support and provide legal guidance to THAI. The consultant will attend all Executive Management Meetings and Board of Directors’ Meetings.

3. Appointment of Management Selection Committee

The Board has agreed to terminate the company regulation 50/ 2001 issued on 19 June 2001 regarding establishment of a Management Selection Committee, with a new committee being appointed as follows:

1. Mr. Virabongsa Ramangkura - Chairman

THAI’s Chairman

2. Mr. Srisook Chandrangsu – Committee member

THAI’s First Vice Chairman

3. Mr. Wissanu Krea-ngam – Committee member

THAI’s Director

4. Mr. Chatsiri Sophonpanich – Committee member

THAI’s Director

5. Mr. Borwornsak Uwanno – Committee member

THAI’s Director

6. Mrs.Chamarie Chitwattanagorn - Committee Member and Secretary

Vice President, Human Resources

Effective from 28 November 2001.

4. Appointment of Management Representatives as Members of the Employee Relations Committee

THAI’s Board of Directors has approved for THAI to appoint nine Management representatives to the Employee Relations Committee, selected from 19 candidates, to replace those whose terms of office have ended due to resignation, retirement and transfers. Those who have been appointed are as follows:

1. Executive Vice President, Human Resources and General Administration

2. Executive Vice President, Operations

3. Vice President, Heavy Maintenance

4. Vice President, Inflight Customer Services

5. Managing Director, Customer Services

6. Managing Director, Ground Support Equipment Services

7. Managing Director, Catering

8. Managing Director, Cargo & Mail Commercial

9. Director, Legal Department

5. Appointment of Business Unit Managing Directors

The Board has approved the further appointment of Managing Directors of Business Units, as the selecting committee proposed to THAI’s Board as follows:

1. Mr. Kawin Asvarchatroj

As Managing Director, Cargo and Mail Commercial

2. Mrs. Ratchaya Pamon-Montri

As Managing Director, Customer Services

3. Flg. Off. Pethai Boonyaves

As Managing Director, Ground Support Equipment Services

4. Mrs. Pismai Chandrubeksa

As Manging Director, Catering

THAI’s Board previously approved the appointment of Mr. Kobchai Srivilas as Managing Director, Technical Services, on 1 November 2001.

6. Investigation into Technical Repair Agreement for Pratt & Whitney PW4158 Engine

The Board has approved the appointment of an investigation committee into the technical repair agreement for Pratt & Whitney PW4158 engine that was signed with SR Technics, committee members as follows:

1. Mr. Borwornsak Uwanno as Chairman

2. Wg. Cdr. Supachai Limpisvasti as Committee Member

3. Mrs. Praneet Panyacheva as Committee Member

4. Mrs. Theeraporn Tontapanish as Committee Member

5. Mr. Bunpot Bourpul as Committee Member & Secretary

6. Mr. Seri Chintanaseri as Advisor

Effective 28 November 2001.

7. Improvement of Inflight Entertainment System and Seats & Products to Boost Passenger Inflight Comfort and Convenience

THAI’s Board of Directors approved plans to improve the airline’s inflight entertainment system and seats, including improvements of products for added passenger inflight comfort and convenience. These adjustments will be made to strengthen THAI’s competitive edge in areas of products, services, and corporate identity, to achieve THAI’s corporate vision as “The First Choice: Smooth as Silk, First Time, Every Time”and to become one of the leading carriers in the world.

The importance of improvement plans will be stressed for inflight products on routes or markets that have potential in areas of industry competition and profitability for the company. It was concluded that further product comparison studies must be conducted on other leading air carriers or those that are THAI’s direct competitors, to improve THAI’s competitive advantage in the area of service provision. In addition, importance was stressed on product life cycle and investment value.

THAI plans to improve its inflight products, as follows:

- Eight Boeing 777-200s and nine Boeing 747-400s

- Six Boeing 777-300s and Airbus 330-300 aircraft (currently in progress)

- Introduction of THAI’s Corporate Identity Campaign

- Place special emphasis on proactive service and product analyses

THAI’s new product and service identity will be launched at the opening of Suvarnabhumi Airport.

8. Purchase of Boeing 747-400 from Leasing Company

THAI’s Board has approved the purchase of the second Boeing aircraft 747-400 from aircraft leasing company Emerald Wing Company Limited once the current agreement has expired on 22 March 2002, since the airline still has need for aircraft utilization. The aircraft has been used for 12 years and has an operating life of 20 years. Purchasing the aircraft from the aircraft leasing company will enable THAI to buy the airplane for less than the bid price, at approximately USD 21.15 million dollars.

9. Financial Results for 2000/ 2001 Fiscal Year

THAI’s Financial Result for the 2000/ 2001 Fiscal Year (October 2000 – September 2001) was reported to THAI’s Board of Directors, as follows.

THAI announced a total revenue of 129,172 million baht and a net profit of 1,929 million baht, which is a decrease of 2,788 million baht or 59.11 percent compared to the same period last year. This is equivalent to 1.38 baht earnings per share compared to the 3.37 baht of the same period last year.

The decrease was mainly due to the relatively high cost of fuel in comparison to the cost in the previous year, resulting in an increase of 5,630 million baht in fuel expense. THAI also experienced a loss from the weakening of Thai baht as a result of foreign loan adjustment, causing a loss of 3,913 million baht in foreign exchange, an loss of 612 million baht more than in the same period last year. This resulted in a loss of net profit at 7,255.27 million baht.

According to the State Enterprise Clause 115 for year 1992, THAI will not be able to issue dividends to shareholders as long as the company experiences accumulated loss in net profit.

10. Dissolution of Debt Management Subcommittee

The Board has agreed to dissolve the Debt Management Subcommittee chaired by Mr. Vichit Suraphongchai and has approved for THAI’s Management to follow-up on debts owed to the airline accordingly, as the members of the subcommittee have conducted a thorough study into the details of debt collection as well as loans. It was found that 90 percent was current debt being handles as normal business transactions, but the remaining 10 percent was overdue, mainly from other airlines, for various services but especially international mail services.

This requires immediate attention.

11. Appointment of THAI’s Long Term Planning Committee

THAI’s Board of Directors has approved the appointment of the airline’s Long Term Planning Committee, to be chaired by Mr. Srisook Chandrangsu, THAI’s First Vice Chairman, in order to establish the airline’s policies including investments and additional routes.