Failed plane lease deals worry CAAT

Chula Sukmanop: Deadbeat airlines hurt the image of Thailand. (File photo)

The Civil Aviation Authority of Thailand (CAAT) will consider revoking the usage of aircraft by Thai-registered airlines after finding that some are not paying the companies they lease the planes from.

The tough measure aims to avoid lengthy proceedings in court between the leasing companies and troubled airlines which are taking advantage of the judicial proceedings to extend the time they use the planes -- without paying the lease fees -- before a ruling is handed down, CAAT director Chula Sukmanop said Wednesday.

However, he refused to name any airlines.

Airlines' failure to pay lease fees has been a problem over the past five years, which risks further tarnishing the image of the Thai aviation industry, he said.

Most Thai-registered carriers rely on leasing services.

Mr Chula said the country will also suffer an image problem with its legal system seen as not being adequate and its court proceedings not benefiting leasing companies in their efforts to reclaim their planes when their customers break the terms of lease contracts.

To solve these problems, the CAAT will consider revoking aircraft usage without waiting until the cases are settled in court, he said.

However, both the troubled airlines and the leasing companies will be first invited by the department to clarify their disputes.

If it is found the airlines have failed to pay the lease fees and the companies subsequently decided to stop leasing their planes, the CAAT will revoke the usage of the aircraft, he said. He didn't say how the measure would be carried out, and whether it could extend to the authorities temporarily seizing the aircraft.

The measure will help ease the concerns of the leasing companies, Mr Chula said, insisting on the department's commitment to "restoring Thai aviation's image and maintaining the trust of leasing companies".

If the CAAT does nothing, the companies may be discouraged from leasing their planes to Thai-registered airlines or charge higher lease fees, he said. It is hoped the measure will help prevent further problems concerning aircraft safety.

If an airline cannot pay the lease fees agreed in the contracts, some might conclude it is suffering liquidity problems, Mr Chula said.

Planes must be maintained constantly to ensure passenger safety, Mr Chula said. It would become a grave concern if an airline does not have enough money for maintenance, he said.

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