US PLANE SALE TO THAI AIRWAYS IS STALLED AGAIN

US PLANE SALE TO THAI AIRWAYS IS STALLED AGAIN

Thai Airways International has been forced by a government ministry to postpone again its decision to buy American for its fleet expansion.

A wrangle has been going on for months between the McDonnell Douglas MD-11 and Airbus Industries' A340 and is jeopardizing expansion plans, a senior Thai Airways official told The Journal of Commerce.A second study comparing the two aircraft concluded for a second time that the MD-11 is more suitable for its purposes. But the Communications Ministry continues to dispute the findings and has ordered another three-month investigation.

The airline official, who refused to be identified, said Tuesday the delay until at least June will hurt expansion plans.

New route agreements with various countries, including the United States, come into affect next year but won't be able to be operated, he said.

The official also said the postponement jeopardizes the airline's plans to modernize its fleet, an area of intense competition among Asian airlines. The ones with the newest planes are the most attractive and get the most business, he said.

Further irritating Thai Airways' officials is that it may not be able to take advantage of a McDonnell Douglas buy-back program. Under it, the manufacturer guarantees to buy back planes at a later date at book value.

Airbus has no such agreement.

The decision over which aircraft to buy has become a tussle between the carrier and the ministry.

Thai Airways insists the MD-11 offers more passenger seats, 288 compared with the Airbus's 240.

The MD-11 is also considerably cheaper, with McDonnell Douglas offering the Thais a price of US$90.3 million per aircraft, against US$95.1 million for the A340.

The MD-11 has greater fuel efficiency, according to the carrier, while the ministry says results of those tests are still inconclusive.

The rift continued at a series of meetings last week with the ministry claiming Thai Airways hadn't made a decision based on Airbus's latest technical data.

The airline source says the material was made available during a stormy meeting in January when talks between Airbus and the carrier broke down.

He says all data indicated the MD-11 is the superior plane and that no further information has become available.

The ministry will pass its decision on to the National Economic and Social Development Board and the cabinet. Both normally approve recommendations by the ministry.