Sunday, November 25, 2012

Investor plans take-off for ailing PC Air

Talks are in an advanced stage for a new investor to take over PC Air, the troubled Thai charter airline that left hundreds of passengers stranded in South Korea's biggest airport last month.

PC Air’s A310-222 jet at Bangkok’s Suvarnabhumi airport before it was impounded at Inchon.

The investor, described by an industry source as a well-heeled Thai family keen to engage in the airline business, would acquire a stake of more than 80% in the carrier, provide a sorely needed capital injection and formulate a revival plan.

Due diligence is under way and a feasibility study being completed to support the takeover of the airline, which is predominantly owned by Piyo Chantraporn, the airline's Thai chief executive who prefers to go by Peter Chan.

PC Air, billed as the world's first to employ the third gender as cabin attendants, had its sole aircraft, an Airbus 310-222 with 200 seats, refused permission for take-off from Inchon airport.

The refusal, which left some 400 Thai passengers stranded, was triggered by a row between PC Air and its South Korean sales agent, Skyjet, over unpaid bills for airport charges and jet fuel, reportedly amounting to more than 10 million baht.

The source, who is close to the negotiations between the investor and PC Air management, told the Bangkok Post that a deal, which includes a major investment for buying aircraft, could be finalised by mid-December.

The time frame was set to allow the grounded airline to get into the skies again and capitalise on the peak season for travel.

A key element in the revival plan for PC Air is the purchase of two B767-300ER jets, medium-sized, wide-bodied, twin-engine aircraft for long-range operations made by the US giant Boeing.

Even 10-year-old models command a price tag of US$45 million, meaning PC Air's new investor must first raise at least $90 million for buying the aircraft.

The source said advisers of the new investor are suggesting PC Air phase out its A310-222 so the airline would operate only one type of aircraft to achieve cost and operating efficiency.

The B767-300ER is seen as ideal for allowing PC Air to continue with its business objective _ running charter flights from Thailand to three East Asian countries with high growth potential _ China, South Korea and Japan.

Until it was grounded, PC Air was operating daily charter flights between Bangkok and Inchon, primarily ferrying groups of Thai tourists.

The new investor reportedly prefers to retain the name PC Air so it can continue operations unabated.

Any change in registration of the Civil Aviation Department's permit would take one year, resulting in a lengthy disruption.

PC Air also has in place the systems needed to revive operations quickly _ cockpit and cabin staff, sales and marketing, and others, said the source.

Despite the bad press following the Inchon episode, PC Air is still seen as offering some brand value, generated mostly by major publicity when it launched a demonstration flight last December featuring four ladyboys including Thanyarat Chirapatpakorn, who was crowned Miss Tiffany Universe 2007, as part of the crew.

Solving the financial problems _ clearing unpaid bills with South Korean entities and paying back money collected from travel agents who purchased air tickets _ forms part of the deal with the new investor, said the source.

Mr Piyo said he has been in South Korea to pursue legal proceedings against the South Korean entities and no longer acts as chief executive of PC Air.

PC Air's troubles have prompted the Civil Aviation Department to ponder toughening regulations for Thai charter airlines including requiring them to place a money guarantee as a surety and submitting a contingency plan in case they are unable to operate flights.

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