THAI : Annual Report 2001

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T h a i Ai r w a y s I n t e r n a t i o n a l Pu b l i c C o m p a n y Li m i t e d

63

Thrives

64

to be the best in the competition

C ontents Operational Highlights of 2000/01 Financial Highlights Chairman’s Statement Message from the Management Review of 2000/01 Operations Review of 2000/01 Finance Ten-Year Review Audit Committee’s Report Report of Independent Auditor Balance Sheets Statements of Income Statements of Changes in Shareholders’ Equity Statements of Retained Earnings Statements of Cash Flows Notes to the Financial Statements Details of Shareholders and Board of Directors Board of Directors Management Team

2 3 4 6 11 25 32 34 36 38 40 42 43 44 46 56 58 60

Thai On-line Offices

Thai Airways International Public Company Limited 89 Vibhavadi Rangsit Road, Bangkok 10900, Thailand Telephone : 66 (0) 2513-0121 Facsimile : 66 (0) 2513-0203 www.thaiairways.com

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Op e r a t i o n a l H i g h l i g h t s o f 2 0 0 0 / 0 1 37th consecutive year of profitability.

Took delivery of four new aircraft and decommissioned two aircraft. THAI now has a total of 81 aircraft in its fleet.

Established Tourism Alliance to promote Thailand tourism and travel industry to help revive the Thai economy.

Increased cooperation at domestic and regional level as well as with other global alliances to strengthen the airline’s competitive edge and expand market share.

Implemented the Customer Relationship Management (CRM) system to meet customers’ demand and maximize their satisfaction.

Launched E-ticketing and automated Self Service System (for domestic travel only) to facilitate passengers’ demand in areas of reservations and check-in.

The Ground Equipment Services Department and Chiang Mai Station Services were awarded ISO 9002 certification from RWTuv Institute from Germany. The Cargo Station Services in Chiang Mai, Hat Yai and Phuket were awarded ISO 9002 certification from Bureau Veritas Quality International Institute (BVQI).

The Catering Services Department was awarded the Prime Minister’s Industry Award 2001 under the Quality Management category from the Ministry of Industry.

THAI was ranked among the top ten Best Asia-Pacific Airlines, according to the survey conducted by Business Traveller Asia Pacific magazine 2000.

THAI was named among the top three Best Intercontinental Airlines, according to the survey conducted by Business Traveller magazine, Germany.

THAI’s Royal Orchid Plus frequent flyer program won the Freddie Award 2000 for the fourth consecutive year.

THAI was the winner of the Best Overall Business Traveller’s Cellars in the Sky award and Best White Wine Category.

The airline was also among the top five for

Best Champagne on board.

The “THAI Cargo” website was among the top four Best Corporate website in a competition of leading Asian websites organized by the Hong Kong Media.

THAI won four ASEANTA Awards for Excellence 2001 for best advertising and public relations materials.

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F inancial Highlights Thai Airways International Public Company Limited and Subsidiaries

(in million Baht, except amount per share)

Fiscal Year

2000/01

1999/00

1998/99

Total Assets

172,881

167,727

144,810

Shareholders’ Equity

12,528

9,546

9,960

Share Capital

14,000

14,000

14,000

129,173

112,630

107,653

Operating Profit

12,227

14,932

17,164

Profit before Tax

2,865

4,915

6,393

Net Profit

1,929

4,717

5,313

Par Value

10

10

10

Net Profit

1.38

3.37

3.79

123.49

119.81

103.44

8.95

6.82

7.11

Operating Revenues

Amount per share (Baht)

Total Assets Shareholders’ Equity

(million Baht)

(million Baht)

120,000

129,173

100,000

15,000

112,630

150,000

107,653

140,000

144,810

160,000

50,000

0

2000

2001

10,000

5,000

0

1999

14,932

(million Baht)

17,164

Operating Profit

172,881

Operating Revenues

167,727

Total Assets

12,227

Note: The Company’s results for fiscal year 1999/00 were adjusted with the accounting policies changed in fiscal year 2000/01.

0

1999

2000

2001

1999

2000

2001

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C hairman’s Statement Fiscal year 2001 was one in which Thai Airways Public Company Limited had to face various types of turbulence. Poor economic performance, higher oil prices, and a weaker Baht all affected our operations. At the same time, we had to face severe competition and rapid change within the industry world-wide. THAI, consequently, has had to adopt new strategies to deal with these circumstances and work dynamically to achieve new standards of efficiency and competence in services, products, operations, and management. We have made particular efforts to develop the abilities of our staff and the quality of our services, as these two factors are vital to our competitive position in the airline business. Our aim is to be one of the top three airlines in the region within the next five years.

These new strategies and restructuring are all part of the State’s policy to make THAI a highperforming State enterprise in terms of financial and operational management. More stress will be placed upon reducing costs, increasing revenue, and consolidating financial stability. Achievement of qualitative and quantitative goals will be measured by means of new systems of evaluation.

This year, therefore, THAI’s operations will concentrate on expanding our First Class and Business Class markets, which are best able to provide extra income, penetrating the E-Commerce market, and utilizing information technology to generate revenue and make purchasing decisions more effectively, seek income from businesses related to air travel, and improve operational efficiency. We also aim to make optimum use of our existing personnel and enlarge our various business alliances. These include co-operation on flight routes, technology transfers, joint marketing ventures, and new forms of co-ordination with State and private-sector agencies involved in tourism and Suwannaphumi Airport. The main goal, of course, is aggressive market expansion and promotion of Thailand as the most competitive destination and aviation hub in the region.

Together with these initiatives, THAI has adopted good business practices to facilitate our operations, and is restructuring parts of our organization into business units so as to reduce operating costs and expenses and manage risks related to fuel purchases and exchange rate fluctuations.

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The restructuring of the Company’s financial status and transformation of THAI into a commercial entity by in creasing its capital will enable the Company to administer business affairs more efficiently and reduce our debt-toequity ratio to international standards. The Company plans to sell newly issued shares to public investors and to seek joint venture partners capable of strengthening the corporate structure and improving its competitive position through its privatisation process. THAI strives to serve as a model for the rationalization of State enterprises in Thailand, thus encouraging foreign investors to invest in other State enterprises for the long term.

The above-mentioned restructuring has been carried

Chai-Anan Samudavanija

out regardless of obstacles and difficulties during the past

Acting Chairman

year. As a result, I am confident that the next step of THAI

September 28, 2001

will not only improve our competitive position and make us the number one airline in the region but will also be a strategic move for the benefit of all Thais as we gain prominence on the international stage.

On this occasion, and on behalf of the Board of Directors, I would like to thank all our employees for their whole-hearted dedication to their duties. I am also grateful to our shareholders and all who have contributed to our Company’s operations in so many valuable ways over the years.

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Me s s a g e f r o m t h e M a n a g e m e n t The severe recession which began in 1997 has continued to sap the strength of the economies of Thailand and other countries in the region. This disadvantage, together with a weaker Thai Baht, higher fuel prices around the globe, and increased competition among airlines, produced yet another series of difficulties in business for THAI in the fiscal year 2001.

It is essential that THAI works aggressively towards streamlining its performance, both in operations and management, and establishes clear goals and directions that will re-establish the Company’s competitive potential in the international arena. THAI needs to be strong enough to face and overcome economic instability and all the other factors that threaten its achievements. This restructuring becomes all the more important in view of the government’s policy of transforming State enterprises into effective business entities, and of preserving THAI’s identity as Thailand’s national airline.

The main task of THAI during the year, therefore, has been to enhance the Company’s level of performance in keeping with our strategy of aggressive restructuring. Our chief focus has been on quality and efficiency of services, products, operations, and management. We have worked for a stronger ability to keep costs down, generate profit, and provide satisfaction to passengers, in order that our customers may regard THAI as their first-choice carrier. We strive to incorporate standards of excellence in every step we take as we compete regionally and globally.

Upgrading for Greater Competitive Excellence THAI has upgraded and modernized its aircraft fleet for greater efficiency and capacity.

Four new planes, two Boeing 777-300s and two Boeing 747-400s, have been commissioned, along with new flight schedules, flight routes, and aircraft management routines that are meant to accommodate an increase in the number of passengers. Our Star Alliance network and our relationships with neighbouring countries’ airlines and our own domestic airlines have been strengthened to provide broader coverage, reduce operating costs, offer greater value, and provide passengers with more of the types of flights they want.

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Focusing an Aggressive Strategy on the Target Segment and New Markets THAI has been successful in aiming for and gaining more income from its designated target groups and new markets. This year, our plan has been to expand First Class and Business Class segments by improving in-flight products, offering greater convenience to service users on the ground, and introducing a Revenue Management System for maximum efficiency in organizing seat reservations on each flight. We have also improved the information technology we use to serve customers and actively utilized E-Commerce for better marketing contacts.

THAI has also joined hands with State and private

Somchainuk Engtrakul

agencies in developing new markets, i.e. the Meeting,

Acting President

Incentive, Convention, and Exhibition markets, or MICE.

September 28, 2001

We are participating more in the Tour Suwannaphumi Program, package tours, and culture- and environment-based tourism in the North and Northeast of Thailand. Our marketing promotion programs include “Royal Orchid Holidays”, which incorporates special interest golf and spa promotions with tourism programs, and our frequent flyer program “Royal Orchid Plus”, which works in cooperation with hotels, credit cards and car rental companies.

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Enhancing Our Ability to Offer Professional Services To better serve our passengers, and as the chief impetus for all our improvements, THAI is emphasizing its Thai identity and the characteristic Thai gentleness and friendliness. This cultural characteristic is what impresses passengers all over the world.

THAI is, moreover, careful to choose the best-tasting, highest-quality foods and beverages to serve our guests. Our wine selection was voted the Best Cellar in the Sky. By offering extra comfort, safety, and professionalism, we aim to give our customers the utmost in satisfaction, in the air or on the ground. Part of this approach includes an automated Self-Service Kiosk ticket reservation, purchase and check in System for domestic travellers, and streamlined counter services for faster, smoother check-in procedures.

Building a Stronger Financial Base THAI has adopted a number of measures to ensure that our financial situation will remain strong enough to carry on operations amid economic turmoil and threats to our cost and financial bases. Various strategies are in place to reduce costs and expenses. Of particular importance is a drive to reduce the number of different makes of aircraft and engines we have to maintain and repair. We have also to manage risks related to the cost of fuel procurement and related to foreign exchange rate turbulence.

Restructuring a State Enterprise for Greater Efficiency THAI has been a model for the government’s policy of refashioning State enterprises into effective commercial entities capable of efficient operations and long-term stability. While restructuring certain parts of the Company into business units, THAI also has plans to issue more shares to raise capital from investors. This will reduce the Company’s debt-to-equity ratio and strengthen its capital structure. Another important change has been the upgrading of work assessment and incentives systems to reflect the effectiveness of employees’ contributions to the Company.

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Turning “Thai” ness into Excellence As the country’s national carrier, THAI is proud to play its part in sharing the beautiful customs and culture of Thailand with the world. We have participated consistently in programs promoting Thai tourism, are at the centre of a business alliance with the private and public sectors to promote tourism in Thailand, and co-operate with neighbouring countries to boost tourism in Southeast Asia.

Continuing our record from last year, THAI has been rated one of the world’s best airlines, in various categories, by a number of internationally respected institutes.

THAI was graded as outstanding in terms of quality development and passenger service

by Inflight Research Survey, and one of the top ten carriers in the Asia-Pacific Region for economy class seats, inflight meals, flight staff, and frequent flyer program by Asia-Pacific Business Traveller magazine. THAI’s Royal Orchid Plus was also given

THAI has been rated one of the world’s best airlines,

the year’s Freddie Award for excellence of customer service and best award redemption, as well as being highly rated for its elite level, corporate newsletter and website.

in various categories, by a number of internationally respected institutes.

These major changes going on at Thai Airways International, amid corporate reforms on the inside and economic difficulties on the outside, could not achieve success without the united commitment to achievement shown by staff at all levels of the Company and management in every department. This success is, moreover, dependent on support from the government and shareholders. The management of Thai Airways International would like to express their gratitude to all who have participated in building our potential, broadening our capabilities, and enabling our Company to reach the heights of international competitive excellence.

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R eview of 2000/01 Operations Amount Aircraft Type

2000/01

1999/00

B747-400

16

14

B747-300

2

2

MD-11

4

4

B777-300

6

4

B777-200

8

8

A330-300

12

12

A310-200

-

1

A300-600

21

21

B737-400

10

11

2

2

81

79

ATR72 Total

Company’s Operating Fleet During the year 2000/01, THAI took the delivery of 4 new aircraft. These acquired aircraft are 2 Boeing 747-400s and 2 Boeing 777-300s, and the Company withdrew 2 aircraft, Airbus 310-200 and Boeing 737-400. As a result, the number of aircraft in the operating fleet increased by 2 for a total of 81 aircraft.

As a part of fleet development, the Company developed toward the aircraft with increased seat capacity on European routes. A step-up from MD-11 to Boeing 747-400 was made on Bangkok-Munich. On Bangkok-Frankfurt route, the service

The Company developed

was homogeneously served by Boeing 747-400 every day. On Australian routes,

toward the aircraft with

all routes were served using Boeing 777-300, except the service to Perth operated

increased seat capacity.

with Airbus 330-300. On Regional routes, Bangkok-Dhaka was served by Airbus 330-300 changed from MD-11 to increase the seat capacity. Finally, the service Bangkok-Phnom Penh on Indochina routes added capacity by changing from Boeing 737-400 to Airbus 300-600.

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Destination and Route Development During the year, THAI aggressively developed and expanded its destinations and routes to strengthen its competitive position in the increasingly competitive market.

The expansion continued in such high potential and stabilized markets as Europe and Australia.

By summer 2001, 73 cities in 34 countries covering 4 continents of

the world, including domestic destinations, were covered by the Company’s network.

Additionally, the serviced destinations were further extended to the total of 104 cities in 45 countries within 5 continents by joint operations with other airlines.

Since

the market and competition in aviation industry has been continuously changing, the Company has always stayed adaptive to the changes and strategically made adjustments to route frequencies and capacities of the aircraft deployed in its network.

North Pacific Route The Company operated daily flights to Los Angeles. Among those, 4 flights a week were operated via Tokyo and the rest were via Osaka. Under Code-Sharing agreement with United Airline (UA), the services of Los Angeles-San Francisco, Los Angeles-Chicago, Los Angeles-Denver, Los Angeles-New York, Los Angeles-Seattle, Los Angeles-Denver, and Los Angeles-Washington D.C., Taipei-San Francisco, Tokyo-Chicago and TokyoSan Francisco, totally, North Pacific services were increased by 7 destinations.

Europe Route The Company extended to 56 flights a week to Europe. It was foreseen that the Europe market showed a very high potential for its network growth due to economic strength and stability. The expansion included 10 flights a week with Boeing 747-400 Bangkok-Frankfurt, an aircraft upgraded from MD-11 to Boeing 747-400 on the route Bangkok-Munich.

Furthermore, the Company increased another frequency on

the routes Bangkok-Stockholm and Bangkok-Athens to bring the services to 4 and 3 flights a week respectively.

In code-share cooperation with Lufthansa Airlines,

17 more destinations in Central Europe from Frankfurt and Munich, including German domestic market were served.

Australia and New Zealand Route The Company flew to 5 destinations, Sydney, Melbourne, Brisbane and Perth in Australia and Auckland in New Zealand, with 24 flights a week. During the year, it added additional services to the routes, Bangkok-Sydney-Auckland and BangkokSydney-Melbourne-Bangkok by 2 flights a week each. The service of Bangkok-BrisbaneMelbourne-Bangkok was increased by 2 flights a week and the service of BangkokPerth was increased by 1 flight to 5 flights a week.

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Regional Route The Company fine tuned its Asian regional network and aircraft deployment to be in line with the market changing demand due to the recovery of the economic downturn. The adjustment was aimed at Far East Asia and ASEAN regions. In the past year, it increased Bangkok-Delhi by 2 flights to daily service, Bangkok-Colombo by 4 flights a week using Airbus 300-600. It changed the aircraft deployed on the route Bangkok-Dhaka from MD-11 to Airbus 330-300 for a capacity expansion. And the service of Bangkok-Lahore was increased by 1 flight to 4 flights a week.

For Northern Asian routes, the Company introduced a new 4 flights a week service Bangkok-Osaka and increased frequency of Bangkok-Nagoya and Bangkok-Fukuoka by 1 flight a week each.

For other North Asian routes, the Company added another flight a week to Bangkok-Seoul, 3 additional flights a week to Bangkok-Shanghai and replaced

THAI aggressively developed

Boeing 777-200 by a larger capacity aircraft type, Boeing 777-300, on the route

and expanded its destinations

Bangkok-Hong Kong-Taipei to accommodate increasing passengers.

and routes to strengthen its competitive position.

The Company expanded the capacity on the Indochina route by replacing Boeing 737-400 service by Airbus 300-600.

The large aircraft deployment was

implemented on the daily service Bangkok-Phnom Penh.

The route Bangkok-

Ubon Ratchathani-Da Nang was changed to 3 flights a week non-stop service Bangkok-Da Nang.

Domestic Route In the preceding year, THAI increased service frequency on the high potential domestic routes. Bangkok-Chiang Rai route was increased from 33 to 35 flights a week, replacing Boeing 737-400 by a larger aircraft Airbus 300-600 on the route BangkokKhon Kaen. It flew to Buri Ram using ATR-72. Since there was increasing tourism in Southern Thailand, the Company changed combined flight Bangkok-Krabi-Trang to separated non-stop services Bangkok-Krabi and Bangkok-Trang. All expansion and adjustments were made to facilitate the tourism industry in Thailand.

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Marketing During the past year, THAI saw an increase in air traffic sales of 15% over the previous year, or 9% higher than the projected target. This rise was due to an aggressive marketing strategy that broadened its outreach to selected market segments and new markets. First-class and business-class passengers were of particular importance, since they were responsible for a proportionately larger boost in income than was provided by economy-class fares.

At the same time, THAI expanded our Royal Orchid Plus Gold Membership by means of incentives and privileges equivalent to those enjoyed by first-class and business-class passengers. Seating, meals, and entertainment services were upgraded in the flight cabin, while on-ground comforts and conveniences were also increased.

Our flight network was adjusted to better reflect market demand, with Bangkok receiving special emphasis as the regional centre of aviation. Flight schedules and routes were harmonized with customer demand, and between-flight connections were streamlined. Co-ordination between THAI and other airlines, either in the Star Alliance group or outside of it, was enhanced by code-sharing on routes not flown by THAI. Rights to high-volume routes were negotiated with other airlines, and efforts were made to extend our network in such a way that incoming passengers would be connected to domestic and regional carriers, thus raising the number of passenger on our flights.

In this way, the maximum payload was achieved for each hour in flight, making every flight more commercially viable. This, in turn, reduced costs and the burden of losses on some routes.

THAI has adjusted our ticket sales system to be more flexible in response to market forces. Some routes allow for a two-interval pricing system, offering better prices than a single rate for the entire route, while other flights determine prices by order of reservation. Prices can even be regulated by the scale of demand and the time of year through the use of a Revenue Management System. This method accelerates sales and optimizes the effectiveness of reserving seats on each flight.

Together with various State and private organizations, THAI has sought out new markets with high potential and ways to make our present market base provide more revenue over the long term. The market for meetings, incentives, conventions, and exhibitions (or MICE) was found to be congruent with the Tourism Authority of Thailand’s plan to promote year 2001 as the “Amazing to Meet� year for Thai tourism.

THAI provided support with tickets for passengers going abroad to bid on overseas projects, and was made the official airline for inbound passengers attending meetings in Thailand, as well as the organizer of tours before and after the meeting.

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Under the aegis of promoting tourism in the “golden land”, THAI has striven to penetrate the Indochina market. Package tours that reveal the cultural and natural beauties of the North and Northeast have been increased, and tours centred on artistic and cultural activities have also been launched as a lead-in to the markets of neighbouring countries. Marketing promotion activities have been organized around our frequent flyer schemes, namely Royal Orchid Plus and Royal Orchid Holiday, with the co-operation of various business groups, such as department stores, credit cards, fuel service stations, communication services, and golf clubs. The role of Royal Orchid Plus, in particular, has been raised from regional to truly international status, and now has a membership

THAI broadened its outreach

of 1.3 million passengers in all parts of the world. In this past year THAI received

to selected market segments

the Freddie Award for the best frequent flyer program of the year from InsightFlyer

and new markets. First-class

magazine. This award was a matter of great pride for THAI. As for other activities related

and business-class passengers

to tourism, we are continuing with our original plans so as to maintain our market base

were of particular importance,

and support the government’s policies for encouraging more revenue from tourism.

since they were responsible for a proportionately larger boost in income.

The Star Alliance The Star Alliance is the largest integrated airline network of its type in the world, with 15 member airlines. The group’s scope of common activities was expanded in response to intensifying competition and a declining economic situation. This enabled each member to benefit more fully from its participation in the Alliance.

Besides helping consolidate the Alliance so as to offer more convenience to passengers, such as allotment of services between airlines with common destinations by means of code-sharing or through joint services, THAI has been utilizing our knowledge, experience, and technology to achieve better management, increased co-operation, lower operational costs, more bargaining power in purchasing, and other potential benefits.

The Star Alliance has decided to develop products not offered by any of its member airlines, and to work on promoting the Alliance’s market as a whole in 2002 by bidding for the MICE market under the “Star” name. The main message will be the advantage of receiving so many extra services integral to the Alliance’s world-wide network. Co-operation will be focused on the diversity of destinations offered, accommodations, and tours in any country chosen by the client for the meeting event.

THAI will benefit from being able to sell our services to large multinational organizations and increasing our first-class and business-class passenger base in the long term.

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To enhance co-operation among members of the Alliance as planned for the coming year, Star website technology will be introduced to facilitate world-wide seat reservations, check-ins, advice on travelling from one place to another, and accumulation of frequent flyer miles. Another plan is to develope joint Star Terminals where checking in and boarding can be offered exclusively to Alliance passengers.

In Asia joint Star Terminals are planned for Narita Airport in Japan and the new Suwannaphumi Airport in Thailand.

To ensure, moreover, that members of the Star Alliance are better co-ordinated in their efforts, a third Alliance office was opened in Thailand. This office serves as a centre for promoting co-operation among Alliance members in Asia.

Cargo Operations THAI is one of the top twenty international cargo carriers in the world. Revenue from cargo services and number of clients are increasing at a rate of 20-30% per year.

This increase is due to improvements in the efficiency of our services, the addition of new routes, greater co-operation with our business partners, and constant development of new services.

During the past year, THAI was quick to enhance our service capacity at all levels. We adopted various systems that have modernized and improved the efficiency of our cargo services in response to rising volumes of international cargo traffic and greater client demand. Of particular significance is that we have combined forces with the International Air Transport Association (IATA) and many of the main airlines doing business in Thailand so as to implement the Cargo Accounting Settlement System.

This system, which administers payments between airlines and cargo agents, is now being implemented so as to provide electronic services for the defrayment of cargo fees.

At THAI, the former method of calculating cargo fees is being adjusted from one based on gross sales to a cargo net sales-based, or CNETS, system. This will accelerate and clarify reports on cargo sales.

THAI is presently studying the feasibility of expanding our warehouse at U-Tapao Airport to accommodate more cargo volume, as part of the Global Transpark project.

There are plans to join the Industrial Estates Authority of Thailand to establish a company, named Asia Transpark, that will carry out this function. The possibility of an investment to construct warehouses at Suwannaphumi Airport is also being studied.

These facilities will be managed as part of a customs-free zone so as to offer exporters and importer maximum convenience and thereby accord with Thai government policy, namely to promote Thailand as the cargo centre of the region.

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More steps have been taken towards implementing quality management and enhancement of service efficiency at the cargo warehouses of international airports in Thailand. During this past year, moreover, such steps have been extended to include our regional cargo warehouse facilities, namely at Chiang Mai, Hat Yai, and Phuket Airports. These airports’ warehouse facilities were certified as compliant with ISO 9002 quality management standards by Bureau Veritas Quality International (BVQI).

Ground Services Based on our policy of providing the best in customer service, the Ground

Based on our policy of

Services Department has worked hard at upgrading our service standards. We have

providing the best in customer

aimed for quality and fluent continuity at every service point, from checking passengers’

service, the Ground Services

tickets and boarding cards to facilitating the movement of outbound and inbound

Department has worked hard

passengers and conducting luggage and bag inspections. Our aim is to provide speedy

at upgrading our service

service that reduces passengers’ waiting times at each counter to no more than five

standards. We have aimed for

minutes, and unloading of baggage to at most thirty-five minutes, for the maximum in

quality and fluent continuity

customer convenience and satisfaction.

at every service point.

THAI has, furthermore, utilized information technology to modernize our services and make them more responsive to customer demands. Automatic ticket selling machines have been installed, for the benefit of domestic passengers, at seven air terminals, namely those of Bangkok, Phuket, Hat Yai, Chiang Mai, Chiang Rai, Phitsanulok, and Khon Kaen. As part of the Self-Service System Program, this service will save time, reduce the complexity of purchasing tickets and reserving seats, and streamline the check-in process. This system can be used in conjunction with E-ticketing, which THAI set up at the same time, thus allowing customers more choices on the ground.

At Chiang Mai Airport, THAI has opened a Royal Executive Class Lounge, so as to provide better service to first-class and business-class passengers. While changing planes or waiting to reboard, these passengers have access to various special facilities within the lounge. Their luggage, moreover, receives priority handling at their final destination.

17

THAI attaches great importance, furthermore, to matters of security on every flight. Procedures for control and inspection of luggage, cargo, and mail are in place to ensure maximum safety. Security systems are managed jointly by the Ground Services Department and various operational units in order to comply with Thai Security Procedures, the standards of the International Civil Aviation Organization, and those of IATA. We have, moreover, appointed a Landside and Airside Security Team to improve security at points of entry into the air terminal area and within the air terminal itself so as to conform to international standards.

Technical Services THAI has made use of the latest technology to improve our aircraft repair and maintenance systems and thus provide passengers the greatest possible safety, to save on the cost of repairs and maintenance performed abroad, and to gain extra revenue by offering our upgraded services to other airlines as well. In this way, our safety policies can be supported, our acquisitions of new aircraft can be sustained, and the demands of our other airline customers can be met.

At present our Technical Department is capable of providing repair and maintenance services to passenger planes of THAI as well as those of over twenty other airlines. At Bangkok, our repair and maintenance facilities are housed in four buildings and can provide both basic and full-scale services. This is supplemented by a second facility at U-Tapao Airport in Rayong, which can provide full-scale services at the C-Check and D-Check levels for three aircraft simultaneously, as well as repair and maintain equipment and parts for passenger cabins. Both these facilities have been certified by the Joint Aviation Authority of Europe and numerous other bodies in various countries. The Bangkok facility, moreover, has been certified by the Federal Aviation Authority of the U.S.A. Due to the intensity of competition, THAI will restructure our Technical Department as a business unit in fiscal year 2001. While allowing complete self-management, this change will contribute to an increase in corporate revenue, enhance operational efficiency and fluency, and increase quality of service to a higher competitive level.

The Six Sigma program will be implemented as a way of boosting efficiency and operational capacity to predetermined target levels, and thus ensure greater safety and satisfaction for our customers. These achievements, moreover, will be clearly and statistically verifiable by means of hard numbers. As a result, expenses will be reduced, revenue will rise, and long-term profitability will be assured. This enhanced competence is essential to the viability of plans for investment in Suwannaphumi Airport. THAI intends to construct our own aircraft repair centre there, thus facilitating the servicing of aircraft parked at the terminal, whether our own fleet or planes belonging to other airlines.

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Catering Services THAI’s Catering Services Department serves passengers on our own flights and those of more than forty other airlines. We are determined to maintain high standards of hygiene, quality, and customer satisfaction. To this end, THAI has been ceaselessly and successfully applying Good Manufacturing Practices (GMP), Hazard Analysis Critical Control Point (HACCP), and ISO 9002 standards to the operations of our Catering Services Department.

As a result, this Department is our number one revenue earner among all auxiliary operations, and enjoys a 64% share of the aviation food services market in Thailand.

The Catering Services Department (International) is capable of preparing an average

As a consequence of these

of 42,000 passenger meals per day. This amount, however, does not satisfy the demand

improvements in terms of

of all potential airline clients. Plans are afoot to enlarge the Catering Services building

quality, the Catering Service

for greater capacity in on-board meal preparation, namely to 47,500 meals per day.

Department (International) was

This expansion will preserve the revenue stream presently being earned from our airline

selected as the outstanding

clients. THAI has a contract to hire P. Construction and Material Co., Ltd. to work on

food business for quality

this expansion project.

management in 2001 by the Ministry of Industry.

The Catering Services Department (International) aims to please customers by means of greater culinary diversity, and so has instituted training for THAI chefs. Experts in the field are invited to teach our chefs new methods of preparing food that combine the best of Thai cuisine with international favourites. Good taste and ease and speed of preparation are prime considerations, as well as the use of high-quality materials available in Thailand.

As a consequence of these improvements in terms of product quality, service excellence, and the development of personnel who are committed to these high standards, along with greater productivity and lower costs, client satisfaction is even greater than before. Not only is the Catering Services Department (International) accomplishing remarkable operational results, earning an average income of 2.909 billion baht per year and an average profit of 661.4 million baht for eight years in succession, but it is winning plaudits for THAI as well. Our Catering Services Department was selected as the outstanding food business for quality management in 2001 by the Ministry of Industry.

Among the services offered by the Catering Services Department (Domestic), which provides meals and beverages on flights within Thailand, are restaurants and snack bars at the airports of Bangkok, Chiang Mai, Chiang Rai, and Phuket, and on-site and off-site catering. Besides making 3,000-3,500 box meals per day, THAI is frequently trusted to provide service at outside functions. Our Puff & Pie bakery services have also been expanded. This past year has been the first that our bakery services have been active outside Bangkok. We now have one branch in Chiang Mai and one in Phuket, totalling twenty-one sites at present. By the end of 2001 three more branches will have been opened, and during the fiscal year 2002 another eight locations.

19

In order to add more money to THAI coffers, the Catering Services Department (Domestic) plans to enter a number of new businesses. One will be a factory to produce beverages, and another will be an expansion in the production of TG Take Home meals.

The Department will also live up to government efforts to promote Thai food overseas by strengthening business partnerships. Rights to THAI franchises and brands will be sold to Thai restaurants overseas, and co-operation with manufacturers will aim to reduce costs. Joint ventures with the kitchens of other airlines at various airports will also seek the benefits of business expansion and greater profits.

Our commitment to ongoing improvement in product and service quality and to constant customer satisfaction have won for the Catering Services Department (Domestic) many quality certificates and a continuous increase in requests for service.

These operations now earn us an average of 1.2 billion baht per year.

Information Technology THAI has used information technology to provide faster, more modern, and more convenient services, create new services, and enhance customer satisfaction. Our target during the year has been to develop our technical capacity to the point that we can truly enter the E-Commerce market. With our launching of E-Service, customers can now reserve seats at our website, www.thaiairways.com, 24 hours a day for both domestic and international flights, request travel information, choose seats, cancel reservations, and check on reservations already made. Customers can also continue to make their reservations by calling 0-2628-2000, day or night, or make their arrangements through THAI travel agents as before.

Electronic ticketing, or E-Ticketing, is the latest development in modern air travel.

Passengers no longer need to hold actual tickets, as all ticketing information is logged into an on-line computer. This facilitates ticket purchases, changes of itinerary, and refunds. Check-ins are easier, as the passenger needs only to display his identity card.

During the first year that THAI introduced this service, all domestic routes were given coverage. On international routes, this service will be implemented on routes to the U.S.A., Japan, Australia, Germany, Hong Kong, Taiwan, and New Zealand.

To strengthen our use of E-Commerce in service business outside the Company, THAI has opened a website for cargo services, www.thaicargo.com. Here customers can reserve cargo space through the internet, get access to news and information about our services, and obtain contact details for sending freight or parcels to any part of the world. This service is useful for senders and recipients, shipping companies, and interested parties in general. Another website, www.thaitechnical.com, offers information about our aircraft repair and maintenance centre and the services we provide to customers from across the globe.

20

THAI has introduced a Revenue Management System to manage income and reservation issues more effectively, thus optimizing payload per flight. This accords with new ticket sales schemes that allow for flexible pricing consonant with market conditions. A Customer Relationship Management program has also been adopted as a way to maintain and enhance good customer relations. Purchasing procedures have been made more transparent, and each department may now store, display, and scrutinize information related to bidding, including results, item names, and pre-bid and post-bid prices, at any time.

Personnel and Training

One of the prime aims of THAI

One of the prime aims of THAI is to become the customer’s first-choice carrier.

is to become the customer’s

To accomplish this, we need to use our service mind to provide optimum satisfaction

first-choice carrier. To accom-

to every customer. For every department to perform in this way, training programs that

plish this, we need to use

help personnel to enhance the effectiveness of their operations and service are required

our service mind to provide

at every point. Of most importance, of course, is the service provided by our on-board

optimum satisfaction to every

flight attendants. THAI continually strives to apply the constant attention, hospitality,

customer.

and gentleness typical of Thai culture to the task of impressing our passengers, as we have done for the past forty years, and to refine and reinforce those qualities. Trainees are taught to be ready for service, the proper modes of service, how to prepare meals and beverages, how to communicate with passengers, and how to maintain in-flight safety. Every staff member must undergo thirteen months of training, both theoretical and practical, and a probation period of six months thereafter. Only in this way can THAI be assured that our staff are true professionals, capable of providing polite and pleasant service and keeping their passengers’ safety in mind at all times.

Both the quantity and quality of staff at THAI have been upgraded. A diversity of training courses have been provided over the past year to increase our staff’s operational and service skills, their knowledge and managerial talents, their psychological strength, and their expertise in various areas. Career training has also been offered for management in each operational field, adding to their knowledge through modern methods such as the TQM and Six Sigma systems. Good work attitudes and values have also been instilled in all staff, and new concepts have been introduced in keeping with changes in the modern business climate.

21

We have also co-operated with outside organizations to obtain new technologies, wider knowledge, and a higher quality of staff. We have, for example, joined with the Institute of Civil Aviation so that our pilots could undergo a new curriculum referred to as Airline Transition Training. This upgrading of pilot operational capacity is in response to the introduction of more equipment and technologies to the task of flying aircraft. Our goal at THAI is to “produce” sixty pilots per year, which is part of our fleet improvement plan, and to replace retirees.

To maintain standards for our Air Crew Training Centre which are as up-to-date and effective as possible, THAI has approved an investment of 100 million baht in improvements to our Airbus 300-600 flight simulator. Thomson Training and Simulation has been hired for the job of enhancing image systems that will better conform to contemporary international standards.

Community Activities and Corporate Image As Thailand’s national airline, THAI is proud to play a part in advertising our country to the world. Our float, which represented Thailand under the motto “Getting to Know You”, won the Craftsman Award at the 112th annual Rose Parade in Pasadena, California, U.S.A. for the finesse and beauty of its traditional Thai handiwork. This was the fourth consecutive year we have won this award. Our advertising took away four prizes from the 2001 ASEANTA Awards for Excellence as follows: 1. Best ASEAN Cultural Preservation Effort was awarded to the promotional materials printed with THAI’s painted aircraft Suphannahong and Narai Song Suban 2. Best ASEAN Poster was awarded to THAI’s promotional posters featuring Cambodia, Indonesia and Trang province of Thailand 3. Best New Tourism Attraction in the ASEAN region was awarded to THAI’s Underwater Wedding Project organized in Trang province, south of Thailand 4. Best Airlines Program into ASEAN. The receipt of such awards not only reflects the beautiful cultural legacy of our land but also promotes tourism publicity in Southeast Asia as well.

22

Activities Honouring the Royal Family Celebration of the 100th anniversary of the late Her Royal Highness Princess Srinagarindra, the Princess Mother’s birthday.

Support for “Ngan Ratri Si Siam”, the funds from which were offered to Her Majesty Queen Sirikit for use in the Thai Arts and Crafts Foundation “To Mother with Love”, an event in honour of Her Majesty Queen Sirikit’s birthday celebrations on August 12.

Donation of money to Her Royal Highness Princess Chulabhorn for the Chulabhorn Foundation in support of a bi-national performance of music and culture (Thailand and China).

Activities for Society

As Thailand’s national airline,

Joint support for programs that seek to prevent drug addiction, such as

THAI is proud to play a part

“One Force for a Non-Toxic World” and programs that seek to replace drugs

in advertising our country to

with music or sports.

the world and participates in

Representative status in Thailand’s participation at Expo 2000 in Hanover,

various social contributions.

Germany.

Support for the awards given to the Thai Inventors Association as a way of promoting creative work by Thai youths.

Joint organization, with the Royal Forest Department, of a program to prevent forest fires around twenty villages in the province of Mae Hong Son and thus reduce loss of valuable forest areas.

Participation with the Chaipatana Foundation in “Thai Airways Plants Life in the Land” at the Haui Sai Royal Development Study Centre, Cha-am district, Phetchaburi province.

Joint support, with the Tourism Authority of Thailand, of the second year of “The River of Kings” program.

Support for various sports competitions, such as jet skiing, golf, marathons, triathlons, long-distance cycling, football, and sports for the disabled.

Organization and support of activities of social benefit, such as “Connecting Thai Hearts to the Victims of Flooding”, lunch programs for school children, the elderly, and the disabled, the annual Red Cross Fair, and perform kathin ceremony for Royal distribution.

23

24

R eview of 2000/01 Finance During fiscal year 2000/01 Thailand continued to struggle with a sluggish economy.

Lower demand for Thai export products in the U.S.A., Japan and Europe was the main factor hampering growth, since Thailand’s export trade to these regions is the main engine driving growth in the local economy. As a result, consumer spending and private-sector investment were also down, and thus also the demand for U.S. dollars.

The values of currencies in the region were lower than in the previous year, and with them the Thai Baht declined as well.

This situation, of course, had a major impact on the operations of Thai Airways International Public Co., Ltd. (THAI). Although the increased number of visitors to Thailand produced greater operational revenue for the airline, this was offset by much higher fuel prices during the first quarter of the fiscal year and by the weaker Baht.

These two factors added a considerable sum to THAI’s operational costs, not to mention the terrorist attacks of September 11, 2001 in the U.S.A., which affected the whole airline industry, THAI included. The fallout from this event, however, did not have much impact on THAI’s results for this fiscal year.

Notwithstanding all this adversity, the operational results of THAI and its subsidiaries for the fiscal year ending September 30, 2001 are quite commendable.

Total profits before tax amounted to 2,865 million Baht, and net profit came to 1,929 million Baht, down 2,788 million Baht or 59.1% from the previous year. Net profit per share thus equalled 1.38 Baht.

Financial Position

The Company’s results are

The Company’s total registered capital, consisting of 1,700 million shares at

quite satisfactory, with total

10 Baht each, amounted to 17,000 million Baht. Its former registered capital had been

profits before tax amounting to

reduced from 16,000 million Baht to 14,000 million Baht on December 12, 2000 by

2,865 million Baht and net

cancelling 200 million unissued shares worth 2,000 million Baht and issuing 300

profits at 1,929 million Baht.

million new shares worth 3,000 million Baht on December 13, 2000. The Company has plans to sell newly issued shares to public investors as a means of strengthening the Company’s capital structure.

25

Assets

Production

Total assets of THAI and its subsidiaries amount to 172,881 million Baht, up

(MATK)

5,154 million Baht or 3.1% from the previous year. The reasons for this increase are: Aircraft under capital leases increased by 8,675 million Baht, or 22.2%, since during this fiscal year the Company acquired two Boeing 777-300 aircraft.

Concessions for acquisitions of aircraft and engines declined by 4,747 million

7,309

6,000

6,838

under bridge lease contracts while awaiting approval of lease financing.

6,473

by 8,395 million Baht, or 183.4%, due to THAI’s use these aircraft

8,490

9,000

7,752

Advance payments for aircraft, i.e. two Boeing 747-400 aircraft, increased

Baht, or 79.1%, since the realized and unrealized benefits from aircraft received was transferred from accounts.

Liabilities and Shareholders’ Equity

3,000

0

1996/97 1997/98 1998/99 1999/00 2000/01

At the end of the fiscal year, total liabilities of THAI and its subsidiaries amounted to 160,252 million Baht, up 2,127 million Baht or 1.3% from the previous year. The main factors determining this figure comprised: The reduction in long-term debt to 114,900 million Baht, down 4,475 million Baht or 3.7% from the previous year. Of this amount, 20,771 million Baht was payable within one year.

A short-term loan of U.S.$180 million from the Ministry of Finance in the form of European Commercial Paper for advance payments for aircraft, and a short-term loan of 1,700 million Baht from the THAI Employees’

Traffic

Savings & Credit Coops Ltd.

(MRTK)

5,083 million Baht was transferred from deferred concessions to reduce cost of aircraft account to reduce the cost of aircraft already received, thus diminishing the deferred concessions to reduce cost of aircraft.

5,097

4,000

ratio was 12.69, compared to 16.47 at the beginning of the fiscal year.

4,585

Baht, total shareholders’ equity was equal to 12,629 million Baht. The debt-to-equity

4,466

Baht. With the holdings of minority interest in subsidiaries amounting to 102 million

5,818

6,000 5,469

As of September 30, 2001, shareholders’ equity amounted to 12,527 million

2,000

0

1996/97 1997/98 1998/99 1999/00 2000/01

26

Passenger Traffic

Production and Traffic

(MRPK)

In fiscal year 2000/01, THAI decommissioned two aircraft and acquired four new aircraft, namely two Boeing 777-300 aircraft and two Boeing 747-400 aircraft.

This helped to increase capacity on regional and intercontinental routes to a total 9.5%

41,347

37,642

32,969

31,288

30,000

45,167

higher than in the previous year. But as traffic rose by only 6.4%, the load factor 45,000

15,000

dropped from 70.6% to 68.5%.

Production and Traffic during Fiscal Year 2000/01

1996/97 1997/98 1998/99 1999/00 2000/01

Change

Production

(MATK)

8,490

+9.5%

Traffic

(MRTK)

5,818

+6.4%

(%)

68.5

-2.1

Passenger Production

(MASK)

60,459

+8.9%

Passenger Traffic

(MRPK)

45,167

+9.2%

(%)

74.7

+0.2

(MADTK)

3,049

+10.6%

(MRFTK)

1,695

+0.3%

(%)

55.6

-5.7

Load Factor

0

2000/01

Cabin Factor Freight Production Freight Traffic Freight Load Factor

In fiscal year 2000/01 THAI carried 18,619,070 passengers, up 918,618 or 5.2% from the previous year. Total number of block hours increased by 15,896 hours or 6.2% to 271,564 hours. Average daily aircraft utilization was 9.6 hours, up from 9.3 hours in the year before.

Freight Traffic (MRFTK)

Revenue In fiscal year 2000/01 total revenue of THAI and its subsidiaries amounted to 130,576 million Baht, up 16,306 million Baht or 14.3% from the previous year.

(Unit : Million Baht) 1,695

1,690

1,644

1,548

1,200

1,598

1,800

- Freight - Mail Total transportation revenue Other activities revenue

0

1996/97 1997/98 1998/99 1999/00 2000/01

Change

101,297

+17.7%

20,464

+4.4%

656

+7.5%

122,417

+15.2%

6,449

+5.6%

307

+21.8%

129,173

+14.7%

1,403

-14.5%

130,576

+14.3%

Transportation revenue - Passenger and excess baggage

600

2000/01

Revenue from subsidiaries Total operating revenue Other revenue Total revenue

27

Load Factor

Operating revenue, which increased by 16,543 million Baht or 14.7%

(%)

to 129,173 million Baht, consisted of the following:

Transportation revenue, which rose by 16,147 million Baht or 15.2% to 122,417 million Baht, resulting from a larger volume of traffic, an expansion of THAI’s first-class and business-class market segment, development of new sales systems, an increase in

2000/01

Change

System-wide

(Baht/RTK)

21.04

+8.3%

Passenger

(Baht/RPK)

2.23

+7.7%

(Baht/RFTK)

12.08

+4.1%

Freight

Passenger and excess baggage revenue of 101,297 million Baht amounted to 82.7% of transportation revenue. This was 15,230 million Baht or 17.7% higher than in the previous year.

Domestic passenger revenue, which accounted for 11.7% of total passenger revenue excluding excess baggage revenue, grew 11.5%. The cabin factor increased from 67.7% to 68.8%. Passenger yield rose from 3.02 Baht/RPK to 3.27 Baht/RPK due to THAI having raised domestic air fares by an average of 13.5% from April 2000 onwards.

Regional passenger revenue, which accounted for 49.1% of total passenger revenue excluding excess baggage revenue, increased 16.0%. The cabin factor declined from 74.8% to 72.8%. Passenger yield rose from 2.61 Baht/RPK to 2.88 Baht/RPK. Intercontinental passenger revenue, which accounted for 38.5% of total passenger revenue excluding excess baggage revenue, grew 21.8%. The cabin factor increased from 75.6% to 77.3%. Passenger yield rose from 1.49 Baht/RPK to 1.61 Baht/RPK. Freight revenue of 20,464 million Baht rose by 871 million Baht or 4.4% from the previous year. The freight load factor declined from 61.3% to 55.6% due to slower export activity.

28

68.5

70.6

69.7

year. The details of yield for fiscal year 2000/01 were as follows:

67.0

70 69.0

domestic air fares, and a weaker value of Baht when compared to the previous fiscal

60

50

0

1996/97 1997/98 1998/99 1999/00 2000/01

Number of Passengers (Million persons)

Other activities revenue, amounting to 6,449 million Baht, rose by 341 million Baht or 5.6%, and consisted of the following: (Unit : Million Baht) 2000/01

Change

1,281

+2.7%

Domestic catering and restaurant

465

+8.1%

Limousine services

200

+31.6%

4,380

+5.4%

113

+10.8%

10

-

17.7

16.3

15.2

15.2

12

18.6

Catering services 18

Ground handling and services to air carriers Sales on board Thai shop

6

Total

6,449

+5.6%

The Company opened its “Thai Shop� souvenir stores as a profit center in

0

1996/97 1997/98 1998/99 1999/00 2000/01

October 2000.

Revenue from subsidiaries, amounting to 307 million Baht, increased by 55 million Baht or 21.8%, was derived from Thai-Amadeus Southeast Asia Co., Ltd. Other revenue, amounting to 1,403 million Baht, declined by 237 million Baht or 14.5%. The main reason for this was that the profits derived from the sale of assets were lower. In this fiscal year the Company realized a profit from the sale of assets amounting to 216 million Baht, of which 35 million Baht was proceeds from the sale of an Airbus 310-200.

Expenses In this fiscal year THAI and its subsidiaries incurred expenses amounting to 129,347 million Baht, 19,992 million Baht or 18.3% higher than in the previous year.

(Unit : Million Baht) 2000/01

Change

114,429

+19.7%

2,375

+17.4%

Expenses of subsidiaries

142

+46.4%

Total operating expenses

116,946

+19.7%

Other expenses

12,401

+6.4%

Total expenses

129,347

+18.3%

Transportation expenses Other activities expenses

29

Operating Revenue

Operating expenses, amounting to 116,946 million Baht, increased by 19,248

(Million Baht)

million Baht or 19.7% and consisted of the following:

Transportation expenses, amounting to 114,429 million Baht, increased by

of 7.3% increase in weighted average fuel price. This effect was further

50,000

112,630

to an increase of 5,630 million Baht or 30.1% in the cost of fuel, as a result

107,653

100,000

84,687

Flight operations expenses rose by 6,540 million Baht or 28.4%, due mainly

105,493

costs, and the lower value of the Baht.

129,173

18,851 million Baht or 19.7% due to rises in the fuel costs, overhaul and maintenance

heightened by the weakening Baht and a greater number of flights by THAI. Overhaul and maintenance expenses increased by 4,793 million Baht or 52.7% due to an increase in number of aircraft and flight hours. In this

10,000

fiscal year, overhaul engine costs increased by 3,111 million Baht resulting from repairing and testing Pratt & Whitney engines in compliance with

1996/97 1997/98 1998/99 1999/00 2000/01

FAA requirements.

Ground operations expenses rose by 2,430 million Baht or 15.1% due to a greater number of flights and a weaker Baht.

Passenger service expenses rose by 1,700 million Baht or 12.8% due to a greater number of passengers and flights.

Marketing expenses increased by 1,753 million Baht or 14.0% due to higher sales revenue and a weaker Baht.

Lease of flight equipment costs increased by 1,073 million Baht or 10.1% due to the bridge lease for aircraft received this year while awaiting lease financing and the weakening of the Baht.

Aircraft depreciation costs increased by 724 million Baht or 9.9% due to a larger number of aircraft in the fleet.

Other activities expenses, amounting to 2,375 million Baht, increased by 352 million Baht or 17.4% and consisted of the following: (Unit : Million Baht) 2000/01

Change

Catering services

292

-5.2%

Domestic catering and restaurant

256

-3.8%

Limousine services

226

+17.7%

1,588

+27.3%

Sales on board

6

-14.3%

Thai shop

7

-

Ground handling and services to air carriers

Total

30

0

2,375

+17.4%

Profit before Tax

Expenses of subsidiaries, namely Thai-Amadeus Southeast Asia Co., Ltd.

(Million Baht)

and Thai Information Solutions Co., Ltd., amounting to 142 million Baht, increased by 45 million Baht or 46.4% over the previous year.

Other expenses, amounting to 12,401 million Baht, increased by 744 million Baht or 6.4% from the previous year. The main cause of this was a rise in interest expenses of 761 million Baht or 11.1%, and an increase of 609 million Baht or 18.4%

of foreign loans into Thai currency when comparing its year-end value for fiscal year

4,004

4,000

in losses on foreign exchange rate due to the weaker value of the Baht in the conversion 4,915

5,268

6,393

6,000

2,865

2,000

2000/01 to that of 1999/00.

Net Profit of Minority Interest Net profit of minority interest amounted to 52 million Baht, represented by a 45% share of net income from Thai-Amadeus Southeast Asia Co., Ltd.

0

1996/97 1997/98 1998/99 1999/00 2000/01

Extraordinary items These include profits from insurance policies. On March 3, 2001, a fire in a Boeing 737-400 at Don Muang Airport destroyed the entire aircraft. After deducting the aircraft’s residual value and the fees THAI had to pay for fulfilling its lease contract debt obligations in advance, the compensation received from the insurance policy gave it an overall profit from insuring this aircraft of 1,636 million Baht.

Changes in Accounting Policy In fiscal year 2000/01, THAI changed policy with regard to “other activities revenues and expenses” in the income statements, previously included internal self-serviced revenues and expenses as well as revenues and expenses for servicing outsiders. Instead “other activities revenues and expenses” now includes only revenues and expenses for servicing outsiders. The financial statements for fiscal year 1999/00 were realigned with this change so as to reduce income and expenses for other activities for the years ending September 30, 2001 and 2000 by the amount of 9,681 and 9,082 million Baht, respectively. This change did not affect the Company’s net profit (loss).

31

T e n -Ye a r R e v i e w Thai Airways International Public Company Limited

2000/01

1999/00

1998/99

81

79

79

271,564

255,668

244,065

Number of Aircraft Flight Hours

(Block Hours)

Available Ton-Kilometres

(Million)

8,490

7,752

7,309

Revenue Ton-Kilometres

(Million)

5,818

5,469

5,097

Load Factor

(%)

68.5

70.6

69.7

Number of Passengers

(000)

18,619

17,700

16,331

Available Seat-Kilometres

(Million)

60,459

55,517

51,788

Revenue Passenger-Kilometres

(Million)

45,167

41,347

37,642

Cabin Factor

(%)

74.7

74.5

72.7

Available Dead Load Ton-Kilometres

(Million)

3,049

2,756

2,648

Revenue Freight Ton-Kilometres

(Million)

1,695

1,690

1,644

Freight Load Factor

(%)

55.6

61.3

62.1

Number of Personel

(People)

25,963

25,632

24,148

Profitability (Result before Tax)

(Million Baht)

2,760.7

4,820.3

6,392.7

Notes: (1) All data shown for fiscal year from October 1 - September 30, or as at September 30.

(2) The Company’s results for fiscal year 1999/00 were adjusted with the accounting policies changed in fiscal year 2000/01.

Definition of Aviation Terms Available Ton-Kilometres (ATK) Capacity offered for sale expressed as aircraft payload multiplied by flown kilometres.

Revenue Ton-Kilometres (RTK) Capacity sold expressed as tons of load carried multiplied by flown kilometres.

Load Factor Revenue ton-kilometres expressed as percentage of available ton-kilometres.

Available Seat-Kilometres (ASK) Passenger capacity offered for sale expressed as number of seats multiplied by flown kilometres.

Revenue Passenger-Kilometres (RPK) Passenger capacity sold expressed as number of passengers multiplied by flown kilometres.

32

1997/98

1996/97

1995/96

1994/95

1993/94

1992/93

1991/92

77

76

73

69

61

62

67

238,696

233,495

211,818

201,973

186,321

175,931

172,924

6,838

6,473

5,789

5,469

5,011

4,662

4,461

4,585

4,466

3,940

3,755

3,467

3,066

2,781

67.0

69.0

68.1

68.7

69.2

65.8

62.3

15,199

15,178

14,308

12,834

11,502

10,183

8,720

48,557

45,353

42,099

39,795

36,279

33,878

32,263

32,969

31,288

29,226

26,558

24,733

22,208

20,226

67.9

69.0

69.4

66.7

68.2

65.6

62.7

2,468

2,391

2,000

1,864

1,746

1,613

1,558

1,548

1,598

1,266

1,320

1,197

1,020

908

62.7

66.8

63.3

70.8

68.6

63.2

58.3

24,222

24,072

22,136

21,541

19,944

19,560

19,286

5,268.2

4,004.1

4,885.6

4,595.6

4,212.2

1,380.8

4,381.1

Cabin Factor Revenue passengers-kilometres expressed as percentage of available seat-kilometres.

Available Dead Load Ton-Kilometres (ADTK) Capacity offered of aircraft pay load after deduction of weight of the load of passengers multiplied by flown kilometres.

Revenue Freight Ton-Kilometres (RFTK) Freight capacity sold expressed as tons of freight carried multiplied by flown kilometres.

Freight Load Factor Revenue freight-kilometres expressed as percentage of available dead load ton-kilometres.

Aircraft Payload Weight of the load of passengers, cargo and other load carried on a fully loaded aircraft using the average density of cargo.

33

A udit Committee’s Report To the Shareholders

The Board of Directors of Thai Airways International Public Company Limited formally appointed the Audit Committee for the year 2001. The committee comprises three independent directors as follows: On January 11, 2001 appointed 1) Mr. Poonsup Piya-anant

Chairman of the Audit Committee

2) Mr. Wissanu Krea-ngam 3) Mr. Sansern Wongcha-um On May 2, 2001 appointed 1) Mr. Thanong Bidaya

Chairman of the Audit Committee

2) Mr. Wissanu Krea-ngam 3) Mr. Sansern Wongcha-um On October 9, 2001 appointed 1) Mr. Olarn Chaipravat

Chairman of the Audit Committee

2) Mr. Vichit Suraphongchai 3) Mr. Borwornsak Uwanno The Audit Committee held six meetings.

The Audit Committee’s function and responsibilities include review of sufficiency and credibility of the financial statements, review of adequacy and effectiveness of the internal control systems, and review of compliance with relevant laws and regulations.

The committee reviewed the financial statements for the year ended

September 30, 2001 in collaboration with the certified public accountant, including a review of the internal audit’s reports. Furthermore, the committee has recommended that Risk Management, especially Financial Risk should be instituted and properly executed.

The Audit Committee carried out the functions independently of the Executive Directors and management of the Company. There is no restriction for the committee to access the information and has full co-operation from all functions concerned.

(Mr. Olarn Chaipravat) Chairman of the Audit Committee November 19, 2001

34

No. 0021/2101

The State Audit Office Rama VI Road, Phayathai, Bangkok 10400

This Letter is given to confirm that the English version of the Report of Independent Auditor together with the financial statements for the years ended September 30, 2001 and 2000 of Thai Airways International Public Company Limited and the consolidated financial statements for the years ended September 30, 2001 and 2000 of Thai Airways International Public Company Limited and its subsidiaries was translated by Thai Airways International Public Company Limited. The State Audit Office has reviewed the aforementioned translated Report of Independent Auditor and the financial statements and found that they were translated from those of the Thai version.

Given on November 28, 2001

(Oraphin Patamalikitskul) Acting Director of Government Enterprises Audit Office for Auditor General Acting the Governor of the State Audit Office

35

Official Translation

R e p o r t o f I n d e p e n d e n t Au d i t o r To: The Shareholders of Thai Airways International Public Company Limited

1. The State Audit Office has audited the accompanying consolidated and the Company balance sheets as at September 30, 2001 and 2000, the related consolidated and the Company statements of income, changes in shareholders’ equity, retained earnings and cash flows for the years then ended of Thai Airways International Public Company Limited and its subsidiaries. These financial statements are the responsibility of the Companies’ management as to their correctness and completeness of the presentation. The responsibility of the State Audit Office is to express an opinion on these financial statements based on its audits.

2. The State Audit Office conducted the audits in accordance with generally accepted auditing standards. Those standards require that the State Audit Office plans and performs the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.

An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. The State Audit Office believes that the audits provide a reasonable basis for the opinion.

36

3. In the opinion of the State Audit Office, the consolidated and the Company financial statements referred to above present fairly, in all material respects, the consolidated and the Company financial position as at September 30, 2001 and 2000, the results of the consolidated and the Company operations, changes in the consolidated and the Company shareholders’ equity, and the consolidated and the Company cash flows for the years then ended, and the accumulated results of the consolidated and the Company operations as at September 30, 2001 and 2000 of Thai Airways International Public Company Limited and its subsidiaries, in conformity with generally accepted accounting principles.

4. Without qualifying opinion on the financial statements, the State Audit Office draws attention to Note 3.1 to the financial statements regarding the effect of the change in accounting policy on internal self-serviced revenues and expenses.

(Signed) Yaowadee Rungrojchaiporn (Yaowadee Rungrojchaiporn) Acting Director Government Enterprises Audit Office

(Signed) Oraphin Patamalikitskul (Oraphin Patamalikitskul) Auditor-in-Charge

The State Audit Office November 25, 2001

37

Thai Airways International Public Company Limited and Subsidiaries

B alance Sheets As at September 30, 2001 and 2000 (Unit : Baht)

Consolidated 2001 2000

Accounting Supplementary

Policies

The Company 2001 2000

(new adjustment)

Information

(new adjustment)

ASSETS Current Assets Cash and bank balances

3.3

Short-term investments

6,596,023,510

9,450,166,640

6,444,070,410

2,817,320,027

4,115,271,554

2,715,564,400

9,358,886,656 3,978,038,139

Accounts receivable-net

2.1

3.4

11,190,298,414

12,058,680,719

11,186,729,314

12,057,961,974

Inventories and supplies

2.2

3.5

3,609,692,877

3,490,188,256

3,609,692,877

3,490,188,256

Prepaid expenses and deposits

4,476,201,302

4,375,002,605

4,476,052,327

4,374,763,239

Tax refund

2,907,488,858

4,778,814,038

2,907,488,858

4,778,814,038

Other current assets

3,682,456,534

2,815,914,920

3,609,868,605

2,786,109,235

35,279,481,522

41,084,038,732

34,949,466,791

40,824,761,537

987,929,778

Total Current Assets Investments

2.3

3.6

Investment in associated companies

3.6.1

884,320,360

820,665,920

1,110,720,094

Other investments

3.6.2

94,493,996

101,665,446

94,493,996

101,665,446

978,814,356

922,331,366

1,205,214,090

1,089,595,224

Aircraft

55,557,060,836

57,306,058,640

55,557,060,836

57,306,058,640

Aircraft under capital leases

47,825,588,554

39,151,454,599

47,825,588,554

39,151,454,599

Revolving aircraft spare parts

9,089,701,633

8,872,308,925

9,089,701,633

8,872,308,925

Land, buildings and improvements

3,659,675,560

4,123,008,982

3,659,675,560

4,123,008,982

Other plant and equipment

4,457,727,654

4,123,681,702

4,413,116,222

4,113,219,241

120,589,754,237

113,576,512,848

120,545,142,805

113,566,050,387

12,971,766,099

4,576,868,133

12,971,766,099

4,576,868,133 5,998,117,168

Total Investments Property, Plant and Equipment-Net

2.4

3.7

Total Property, Plant and Equipment-Net Other Assets Advance payments for aircraft

3.8

Concessions for acquisitions of aircraft and engines Loan for investment in aircraft spare parts Deferred income taxes Total Other Assets Total Assets

2.5

1,251,033,880

5,998,117,168

1,251,033,880

3.9

28,103,698

36,688,523

28,103,698

36,688,523

3.10

1,782,019,523

1,532,467,353

1,781,797,379

1,532,467,353

16,032,923,200

12,144,141,177

16,032,701,056

12,144,141,177

172,880,973,315

167,727,024,123

172,732,524,742

167,624,548,325

The accompanying notes are an integral part of these financial statements.

38

(Unit : Baht)

Consolidated 2001 2000

Accounting Supplementary

Policies

The Company 2001 2000

(new adjustment)

Information

(new adjustment)

LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Accounts payable

3,083,368,233

Short-term loans

3.11

9,715,526,000

2,206,276,733 -

3,080,267,887

2,206,276,733

9,715,526,000

-

Debts due within one year Long-term loans Obligations under capital leases

2.6

Promissory notes

3.12

9,794,163,223

11,968,544,716

9,794,163,223

11,968,544,716

3.13

9,926,812,287

5,955,569,677

9,926,812,287

5,955,569,677

3.14

1,050,000,000

1,076,000,000

1,050,000,000

1,076,000,000

12,108,601,272

12,907,469,051

12,104,891,982

12,907,389,051

26,946,237

27,064,347

26,919,987

27,064,347

Other current liabilities Accrued expenses Accrued dividends

3.18

Accrued income taxes Unearned transportation revenue Other current liabilities Total Current Liabilities

41,762,406

57,554,716

12,154,165

11,546,343

12,804,989,534

11,425,548,195

12,804,989,534

11,425,548,195

4,163,605,988

3,872,047,445

4,153,492,505

3,870,728,236

62,715,775,180

49,496,074,880

62,669,217,570

49,448,667,298

Long-term Liabilities Long-term loans

3.12

40,907,334,866

48,353,922,100

40,907,334,866

48,353,922,100

Obligations under capital leases

3.13

44,821,622,603

42,570,954,884

44,821,622,603

42,570,954,884

Promissory notes

3.14

8,400,000,000

9,450,000,000

8,400,000,000

9,450,000,000

94,128,957,469

100,374,876,984

94,128,957,469

100,374,876,984

3,171,023,980

3,406,832,613

Total Long-term Liabilities Other Liabilities Staff pension fund

3.26

Deferred concessions to reduce cost of aircraft

3.15

Total Other Liabilities Total Liabilities

3,406,832,613 -

5,083,534,294

-

3,171,023,980 5,083,534,294

3,406,832,613

8,254,558,274

3,406,832,613

8,254,558,274

160,251,565,262

158,125,510,138

160,205,007,652

158,078,102,556

17,000,000,000

16,000,000,000

17,000,000,000

16,000,000,000

14,000,000,000

14,000,000,000

14,000,000,000

14,000,000,000

4,750,000,000

4,750,000,000

4,750,000,000

4,750,000,000

Shareholders’ Equity Share capital Registered: 1,700 million ordinary shares, as at September 30, 2001 1,600 million ordinary shares, as at September 30, 2000 par value of Baht 10 each

3.16

Issued and fully paid 1,400 million ordinary shares of Baht 10 each Share premium Retained earnings (deficit) Appropriated Legal reserve

3.17

Unappropriated Minority interest Total Shareholders’ Equity Total Liabilities and Shareholders’ Equity

1,032,785,577

1,032,785,577

1,032,785,577

(7,255,268,487)

(10,236,339,808)

(7,255,268,487)

1,032,785,577

12,527,517,090

9,546,445,769

12,527,517,090

101,890,963

55,068,216

12,629,408,053

9,601,513,985

12,527,517,090

9,546,445,769

172,880,973,315

167,727,024,123

172,732,524,742

167,624,548,325

(10,236,339,808) 9,546,445,769

-

-

The accompanying notes are an integral part of these financial statements.

(Signed) Virabongsa Ramangkura (Virabongsa Ramangkura) Acting President

(Signed) Kaweepan Raungpaka (Kaweepan Raungpaka) Executive Vice President Finance and Information

39

Thai Airways International Public Company Limited and Subsidiaries

S tatements of Income for the years ended September 30, 2001 and 2000 (Unit : Baht)

Consolidated 2001 2000

Accounting Supplementary

Policies

The Company 2001 2000

(new adjustment)

Information

(new adjustment)

Operating Revenues Passenger and excess baggage

2.7.1

101,296,895,738

86,066,596,107

101,296,895,738

86,066,596,107

Freight

2.7.2

20,464,218,143

19,592,632,224

20,464,218,143

19,592,632,224

656,119,505

610,574,377

656,119,505

610,574,377

6,755,225,009

6,359,836,027

6,448,643,127

6,107,715,993

129,172,458,395

112,629,638,735

128,865,876,513

112,377,518,701

Mail Other activities

3.1, 3.19

Total Operating Revenues Other Revenues Share of net profit from subsidiary companies

-

65,517,696

65,071,801

Share of net profit from associated companies

152,242,629

164,871,363

152,242,629

164,871,363

Interest income

445,728,138

379,737,476

443,432,011

375,163,862 1,095,315,741

Other income

-

3.20

Total Other Revenues Total Revenues

805,151,889

1,095,315,741

803,789,581

1,403,122,656

1,639,924,580

1,464,981,917

1,700,422,767

130,575,581,051

114,269,563,315

130,330,858,430

114,077,941,468

23,042,368,514

Operating Expenses Flight operations

29,583,436,014

23,042,368,514

29,583,436,014

Maintenance and overhaul

13,894,105,552

9,100,795,314

13,894,105,552

9,100,795,314

Ground operations

18,533,697,927

16,104,185,575

18,533,697,927

16,104,185,575

Passenger services

14,996,446,015

13,297,235,073

14,996,446,015

13,297,235,072

Marketing

14,272,894,055

12,520,215,012

14,272,894,055

12,520,215,012

1,736,931,273

1,814,300,819

1,736,931,273

1,814,300,819

4,108,308

4,064,069

3,242,840

4,001,469

11,646,261,090

10,572,912,022

11,646,261,090

10,572,912,022

Depreciation of aircraft

8,069,101,561

7,345,273,880

8,069,101,561

7,345,273,880

Depreciation of other fixed assets

1,700,840,852

1,776,702,409

1,693,142,058

1,776,272,893

2,508,118,824

2,119,699,018

2,374,670,057

2,022,947,634

116,945,941,471

97,697,751,705

116,803,928,442

97,600,508,204

Administration and general Remuneration to board of directors Lease of aircraft and spare parts

Other activities Total Operating Expenses

3.1, 3.19

The accompanying notes are an integral part of these financial statements.

40

(Unit : Baht)

Consolidated 2001 2000

Accounting Supplementary

Policies

The Company 2001 2000

(new adjustment)

Information

(new adjustment)

Other Expenses Interest expenses

7,598,726,493

6,837,668,353

7,598,713,065

6,837,668,353

Losses (Gains) on foreign currency exchange

3,910,388,805

3,300,814,088

3,913,009,638

3,300,814,088

66,170,406

56,912,828

66,170,406

56,912,828

825,423,658

1,461,818,814

824,682,583

1,461,776,032

Yields from pension fund Other expenses

3.21

Total Other Expenses Total Expenses Profit (losses) before income tax

12,400,709,362

11,657,214,083

12,402,575,692

11,657,171,301

129,346,650,833

109,354,965,788

129,206,504,134

109,257,679,505 4,820,261,963

1,228,930,218

4,914,597,527

1,124,354,296

Income tax

884,717,727

149,450,784

832,186,043

103,433,436

Profit (losses) before minority interest

344,212,491

4,765,146,743

292,168,253

4,716,828,527

Net profit of minority interest Earning (losses) before extraordinary item Extraordinary item

52,044,238

48,318,216

292,168,253

4,716,828,527

-

-

292,168,253

4,716,828,527

3.24

Gain from the insurance for exploded and caught fire aircraft

1,636,352,566

Net profit (losses) for the year Primary earning (losses) per share

1,928,520,819

-

1,636,352,566

4,716,828,527

1,928,520,819

4,716,828,527

2.8

Earning (losses) before extraordinary item

0.21

Extraordinary item

1.17

Net profit (losses) for the year

1.38

3.37 -

0.21

3.37

1.17 3.37

-

1.38

3.37

The accompanying notes are an integral part of these financial statements.

(Signed) Virabongsa Ramangkura (Virabongsa Ramangkura) Acting President

(Signed) Kaweepan Raungpaka (Kaweepan Raungpaka) Executive Vice President Finance and Information

41

Thai Airways International Public Company Limited and Subsidiaries

S tatements of Changes in Shareholders’ Equity for the years ended September 30, 2001 and 2000 (Unit : Baht)

Consolidated 2001 2000

Accounting Supplementary

Policies

The Company 2001 2000

Information

Share capital Common stocks At the beginning of the year

14,000,000,000

Increase during the year

-

At the end of the year

14,000,000,000 -

14,000,000,000 -

14,000,000,000 -

14,000,000,000

14,000,000,000

14,000,000,000

14,000,000,000

4,750,000,000

4,750,000,000

4,750,000,000

4,750,000,000

Capital Surplus Premium on share capital At the beginning of the year Increase during the year

-

At the end of the year

-

-

-

4,750,000,000

4,750,000,000

4,750,000,000

4,750,000,000

1,032,785,577

1,032,785,577

1,032,785,577

1,032,785,577

Retained earnings (deficit) Appropriated Legal reserve At the beginning of the year Increase during the year

-

At the end of the year

-

-

-

1,032,785,577

1,032,785,577

1,032,785,577

1,032,785,577

(10,236,339,808)

(9,823,161,317)

(10,236,339,808)

(9,823,161,317)

Unappropriated Balance at the beginning of the year - before adjusted - Cumulative effect of change in accounting policy income tax in accordance with the new revised accounting standard - Adjustment of income tax

-

477,553,224

-

477,553,224

-

(1,917,534,217)

-

(1,917,534,217)

-

(1,953,224,999)

-

(1,929,910,092)

- Cumulative effect of change in accounting policy with regard to deferred charges - Cumulative effect of change in accounting policy with regard to staff welfare fees

-

Balance at the beginning - after adjusted

(1,736,801,026)

(10,236,339,808)

(14,953,168,335)

(10,236,339,808)

(1,736,801,026) (14,929,853,428)

- Adjustment of recording of exemption tax from losses on foreign currency

3.27

1,053,157,323

- Adjustment of subsidiary companies’ retained earnings Increase (decrease) during the year At the end of the year

(606,821)

-

1,053,157,323 (606,821)

(23,314,907)

1,928,520,819

4,716,828,527

1,928,520,819

4,716,828,527

(7,255,268,487)

(10,236,339,808)

(7,255,268,487)

(10,236,339,808)

Minority interest At the beginning of the year

55,068,216

Prior year adjustment

(496,490)

Increase during the year At the end of the year Total shareholders’ equity

47,319,237

-

-

-

-

-

-

55,068,216

-

-

101,890,963

55,068,216

12,629,408,053

9,601,513,985

12,527,517,090

The accompanying notes are an integral part of these financial statements.

(Signed) Virabongsa Ramangkura (Virabongsa Ramangkura) Acting President

42

(Signed) Kaweepan Raungpaka (Kaweepan Raungpaka) Executive Vice President Finance and Information

9,546,445,769

Thai Airways International Public Company Limited and Subsidiaries

S tatements of Retained Earnings for the years ended September 30, 2001 and 2000 (Unit : Baht)

Consolidated 2001 2000

Accounting Supplementary

Policies

The Company 2001 2000

Information

Retained earnings (Deficit) - Unappropriated At the beginning of the year

(10,236,339,808)

(9,823,161,317)

(10,236,339,808)

(9,823,161,317)

Adjustment of the year: - Cumulative effect of the change in accounting policy on income tax to comply with the revised accounting standard - Adjustment of income tax

-

477,553,224

-

477,553,224

-

(1,917,534,217)

-

(1,917,534,217)

-

(1,953,224,999)

-

(1,929,910,092)

- Cumulative effect of the change in accounting policy on deferred charges - Cumulative effect of change in accounting policy on staff welfare fees

-

Balance-beginning of year after adjustment

(1,736,801,026)

(10,236,339,808)

(14,953,168,335)

(10,236,339,808)

(1,736,801,026) (14,929,853,428)

- Adjustment of recording of exemption tax from losses on foreign currency exchange

3.27

1,053,157,323

- Adjustment of subsidiary companies’ retained earnings Add Net Profit (loss) for the year Total Retained earnings (deficit) - Unappropriated

(606,821)

-

1,053,157,323 (606,821)

(23,314,907)

1,928,520,819

4,716,828,527

1,928,520,819

4,716,828,527

(7,255,268,487)

(10,236,339,808)

(7,255,268,487)

(10,236,339,808)

1,032,785,577

Retained earnings-Appropriated Lagal reserve Total Retained earnings-Appropriated Total retained earnings (deficit) at the end of the year

1,032,785,577

1,032,785,577

1,032,785,577

1,032,785,577

1,032,785,577

1,032,785,577

1,032,785,577

(6,222,482,910)

(9,203,554,231)

(6,222,482,910)

(9,203,554,231)

The accompanying notes are an integral part of these financial statements.

(Signed) Virabongsa Ramangkura (Virabongsa Ramangkura) Acting President

(Signed) Kaweepan Raungpaka (Kaweepan Raungpaka) Executive Vice President Finance and Information

43

Thai Airways International Public Company Limited and Subsidiaries

S tatements of Cash Flows for the years ended September 30, 2001 and 2000 (Unit : Baht)

Consolidated 2001 2000

Accounting Supplementary

Policies

The Company 2001 2000

(new adjustment)

Information

(new adjustment)

Cash flows from operating activities Net profit for the year

1,928,520,819

4,716,828,527

1,928,520,819

4,716,828,527

9,769,942,414

9,121,976,289

9,762,243,620

9,121,546,773

Adjustment to reconcile net profit to cash provided by (paid from) operating activities: Depreciation Incomes on investments by equity method Losses (Gains) on sales of assets Losses on foreign currency exchange

(152,242,629)

(164,871,364)

(217,760,325)

(229,943,165)

272,659,674

(766,106,027)

272,659,674

(766,106,027)

3,512,088,215

4,777,161,528

3,513,192,993

4,777,161,528

52,044,238

48,318,216

395,660,944

550,549,011

395,660,944

550,549,011

301,357,220

117,478,956

300,616,740

117,478,956

16,080,030,895

18,401,335,136

15,955,134,465

18,287,515,603

525,886,852

(1,484,598,318)

529,477,687

(1,483,879,572)

Net profit of minority interest Reserve for obsolete inventories

-

-

Allowance for doubtful accounts, impairment in value of assets Operating profit before changes in operating assets and liabilities Decrease (increase) in operating assets: Accounts receivable Inventories and supplies

(515,165,565)

(280,143,877)

(515,165,565)

(280,143,877)

(50,707,278)

(1,226,821,899)

(50,817,270)

(1,226,706,103)

Prepaid expenses and deposits Tax refund Other current assets Advance payments for aircraft Deferred income taxes Concessions for acquisitions of aircraft and engines

1,871,305,579

(2,838,222,669)

1,871,325,180

(2,838,177,296)

(939,354,182)

3,281,140,702

(934,577,540)

3,350,201,971

(12,971,766,099)

(4,576,868,134)

(12,971,766,099)

(4,576,868,134)

803,605,153

(395,951,578)

803,827,297

(395,951,578)

(130,636,446)

266,831,879

(130,636,446)

266,831,879

Increase (decrease) in operating liabilities: Accounts payable

900,568,841

Accrued expenses and other current liabilities

(527,211,056)

Staff pension fund Unearned transportation revenue Net cash from operating activities

897,468,494 (485,230,352)

(46,874,395) 1,741,231,244

235,808,633

733,420,337

235,808,633

733,420,337

1,379,441,340

1,713,620,581

1,379,441,340

1,713,620,581

6,661,806,667

15,335,460,870

6,584,289,824

15,244,220,660

The accompanying notes are an integral part of these financial statements.

44

(45,842,735) 1,787,561,445

(Unit : Baht)

Consolidated 2001 2000

Accounting Supplementary

Policies

The Company 2001 2000

(new adjustment)

Information

(new adjustment)

Cash flows from investing activities Increase in short-term investments

782,551,063

Cash paid for acquisition of fixed assets Cash received from sales on assets Investment

(2,060,009,450)

782,551,063

(2,060,009,450)

(2,756,249,033)

(4,368,304,483)

(2,714,401,268)

(4,357,412,506)

1,017,825,114

1,123,421,572

1,017,825,114

1,123,421,572

104,610,260

86,634,423

104,610,260

86,634,423

10,264,900

4,265,800

10,264,900

4,265,800

Cash received from loan for investing in aircraft spare parts Net cash from (used in) investing activities

(840,997,696)

(5,213,992,138)

(799,149,931)

(5,203,100,161)

Cash flows from financing activities Cash received from short-term loans

9,917,000,000

Cash paid for repayment of long-term loans Cash paid to promissory notes

Increase (decrease) in cash and cash equivalents

9,917,000,000

-

(19,081,974,841)

(17,895,605,623)

(19,081,974,841)

(1,076,000,000)

10,526,000,000

(1,076,000,000)

10,526,000,000

(10,618,110)

(203,486)

(144,360)

(203,486)

(9,065,223,733)

(8,556,178,327)

(9,054,749,983)

(8,556,178,327)

(3,244,414,762)

1,565,290,405

(3,269,610,090)

1,484,942,172

(125,128,832)

10,322,414

(125,128,832)

10,322,414

Dividends paid Net cash from (used in) financing activities

-

(17,895,605,623)

Effects of exchange rate changes on decreasing in cash and bank balance Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year

3.25

11,397,269,798

9,821,656,979

11,168,756,399

9,673,491,813

8,027,726,204

11,397,269,798

7,774,017,477

11,168,756,399

6,965,956,090

7,778,754,100

6,965,956,090

Supplementary cash flows information: Cash paid during the year for Interest expenses

7,778,754,100

Corporate income tax

-

5,989,084,588

-

5,989,084,588

Non-cash transaction Assets under financial lease

10,740,278,424

20,112,890,468

10,740,278,424

20,112,890,468

The accompanying notes are an integral part of these financial statements.

(Signed) Virabongsa Ramangkura (Virabongsa Ramangkura) Acting President

(Signed) Kaweepan Raungpaka (Kaweepan Raungpaka) Executive Vice President Finance and Information

45

Thai Airways International Public Company Limited and Subsidiaries

N otes to the Financial Statements for the years ended September 30, 2001 and 2000

1. PRINCIPLES OF CONSOLIDATION The consolidated financial statements consist of the financial statements of Thai Airways International Public Company Limited, the Company’s staff pension fund and the two subsidiaries which are Thai-Amadeus Southeast Asia Company Limited and Thai Information Solution Company Limited. Investments in these subsidiaries are stated at equity method. Significant transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1 Allowance for Doubtful Accounts The allowance for doubtful accounts is set up for trade accounts receivable, excluding those from government agencies and state enterprises, which are over six months overdue, at the following rates: Period of overdue

Percentage of allowance for doubtful accounts

Over 6 months to 1 year

50

Over 1 year to 2 years

75

Over 2 years

100

Allowance for doubtful accounts for the estimated losses that may result from uncollectable trade accounts receivable is estimated from the past collection experience and current position of accounts receivable at the date of the balance sheets.

2.2 Inventories and Supplies Inventories and supplies are stated at the moving average cost except for the following items: - Fuel and oil of aircraft are stated at the weighted average cost.

- Inventories in transit are stated at the purchasing date cost.

Unused aircraft spare parts over two years or spare parts for non-exist aircraft in the fleet are presented under “Unused aircraft spare parts and spare parts for sales”, and provision for obsolescence is made at an annual rate of 33.33%. For the current aircraft spare parts, provision for obsolescence is made at an annual rate of 10%.

Inventories and supplies are stated at the lower of cost and net realizable value.

2.3 Investments 2.3.1 Investments in related party are stated at equity method according to a proportion of net assets of the Company’s subsidiaries and associated companies.

2.3.2 The investments in equity securities which are not in demand of the market are classified as general investments. They are stated at net cost after deducting allowance for impairment in value (if any) and immediately recognized as losses in statements of income in the period of impairment.

2.4 Property, Plant and Equipment 2.4.1 Aircraft and aircraft under capital leases are stated at cost including, where applicable, costs of decoration, acquisition costs and interests on loans for purchasing aircraft, which incurred prior to the aircraft being placed into service, deducted by discount from concessions for acquisitions of aircraft. Depreciation is calculated by the straight-line method over the estimated useful life of 20 years with the salvage value of 10% of cost.

2.4.2 Aircraft overhaul costs (D-Check) are stated under the “Aircraft” with the overhaul costs being deducted by depreciation calculated by the straight-line method over the estimated useful life of 4-7 years.

2.4.3 Revolving aircraft spare parts are stated at the acquisition date cost. Depreciation is calculated by the straight-line method over the estimated useful life of 5-20 years.

2.4.4 Other fixed assets are stated at cost on acquisition date or on completion of construction date. Depreciation is calculated by the straight-line method over the estimated useful life ranging from 5 to 20 years.

2.5 Concessions for Acquisitions of Aircraft and Engines Concessions received under contracts for acquisition of aircraft and engines are presented “Concessions for acquisitions of aircraft and engines” (other assets), together with “Deferred concessions to reduce cost of aircraft” (other liabilities). When aircraft and engines are received, the entire concessions under contractual agreements have been transferred from “Deferred concessions to reduce cost of aircraft” to reduce cost of received aircraft. When assets or services under the concessions are received, the concessions for acquisitions of aircraft and engines will be transferred to assets or expenses.

2.6 Obligations Under Capital Leases Obligations under capital leases are liabilities deriving from the purchase of aircraft under long-term capital leases via the financial institutions. These are stated at the obligation values with the financial institutions and the values will be reduced by the amount of repayment.

These leases constitute financial leases.

46

2.7 Airline Revenues Recognition 2.7.1 Passenger and excess baggage revenues: - Revenues from ticket sales and service orders are recognized as incomes when the transportation is provided.

- Unused tickets and service orders are recognized as revenues if they are unused over two years.

2.7.2 Freight revenues are recognized when the Company provides the services and issues its air waybills. The freight for which the Company has already issued the air waybills and carried by other air carriers will be recognized as revenues when the other air carriers do not bill within one year.

2.7.3 Since the fiscal year 1993, the Company has introduced a number of frequent flyer programme named “The Royal Orchid Plus” to promote its sales by offering special rights to its members, using a future transportation services when accumulated mileages meet its criteria. The value of the accumulated mileages is calculated as the money taking to reduce passenger revenues together with unearned transportation revenues (liabilities). Revenues are recognized whenever the members use the services.

2.8 Primary Earnings (Losses) per Share Primary earnings (losses) per share are calculated by dividing net profit (loss) by the weighted average number of ordinary shares which are fully paid-up.

2.9 Foreign Currency Transactions Foreign currency transactions are translated into Baht at the exchange rates which are calculated from the average exchange rate of the Bank of Thailand and commercial banks in the month in which transactions occur.

Assets and liabilities denominated in foreign currency remaining at the year-end are translated into Baht at commercial banks’ average buying and selling rates, as announced by the Bank of Thailand. The gains or losses on exchange rate are recognized as entire incomes or expenses in the period incurred.

2.10 Staff Provident Fund The Company has established an “Employee of Thai Airways International Public Company Limited Registered Provident Fund” since June 26, 1992 in accordance with the Provident Fund Act B.E. 2530. The Company contributes to the fund monthly, at a rate of 9% of the employees’ salaries for members having not more than 20 years of services, and 10% for members having more than 20 years of services.

Such contribution is recognized as an expense of the Company.

2.11 Income Tax The Company tax expense or income consists of current period tax which is calculated in accordance with the Revenue Code and deferred tax asset which is calculated from the temporary differences between the net book value of the assets and its tax base.

3. SUPPLEMENTARY INFORMATION 3.1 The Effect of the Change in Accounting Policies In this fiscal year, the Company has changed policy with regard to “other activities revenues and expenses” in the statements of income, previously included internal self-serviced revenues and expenses as well as revenues and expenses for servicing outsiders. Instead “other activities revenues and expenses” now includes only revenues and expenses for servicing outsiders. The Company has also restated its 2000 financial statements, shown for comparative purpose, as though the Company had consistently followed the new policy. The change has resulted in a decrease in the other activities revenues and expenses for the year ended September 30, 2001 and 2000 by the same amount of Baht 9,681.45 million and Baht 9,082.13 million respectively. This has no effect on the consolidated and the Company net profit (losses).

3.2 Reclassification of Items in Financial Statements The Company has classified the item “Advance payment for aircraft” amount of Baht 4,576.80 million in the balance sheets, previously included in “aircraft” under the heading of “Property, Plant and Equipment” to show as “Advance payment for aircraft” under the heading of “Other Assets” according to Notes to Financial Statement No. 3.7. Also, the items in cash flows ended September 30, 2000 have been reclassified due to the effect of the said classification in the balance sheets and for comparison with the financial statements ended September 30, 2001.

3.3 Cash and Bank Balances (Unit : Million Baht) Consolidated 2001

The Company 2000

2001

2000

Cash in Thailand

12.61

12.12

12.61

Foreign Currencies - Abroad

16.09

12.57

16.09

12.57

3,434.49

5,175.51

3,282.54

5,084.23

Bank Deposits - Abroad

3,132.83

4,249.97

3,132.83

4,249.97

Total

6,596.02

9,450.17

6,444.07

9,358.89

Bank Deposits - Domestic

12.12

47

3.4 Trade Accounts Receivable Trade accounts receivable are classified in accordance with the period of overdue.

(Unit : Million Baht) Consolidated Period of overdue Not over 6 months

The Company

2001 10,980.79

2000 11,991.52

2001 10,977.74

2000 11,990.80

Over 6 months to 1 year

186.06

117.29

185.24

117.29

Over 1 year to 2 years

465.91

33.75

465.47

33.75

Over 2 years

519.27

569.28

519.27

569.28

12,152.03

12,711.84

12,147.72

12,711.12

(961.73)

(653.16)

(960.99)

(653.16)

11,190.30

12,058.68

11,186.73

12,057.96

Less Allowance for doubtful accounts Trade accounts receivable - net 3.5 Inventories and Supplies

(Unit : Million Baht) Consolidated Aircraft spare parts

2001

2000

2001

2000

2,635.28

2,568.22

2,635.28

2,568.22

Vehicle spare parts and ground supporting equipment Unused aircraft spare parts and spare parts for sale

The Company

166.62

157.00

166.62

157.00

1,960.88

1,534.86

1,960.88

1,534.86

Fuel and oil for aircraft

55.13

49.40

55.13

49.40

Goods for sales

167.77

170.07

167.77

170.07

Cabin supplies

118.65

115.75

118.65

115.75

Supplies and other consumable materials

30.29

30.77

30.29

30.77

Stationery and office supplies

83.91

84.20

83.91

84.20

112.82

98.49

112.82

98.49

81.08

88.51

81.08

88.51

5,412.43

4,897.27

5,412.43

4,897.27

(1,802.74)

(1,407.08)

(1,802.74)

(1,407.08)

3,609.69

3,490.19

3,609.69

3,490.19

Inventories in transit Obsolete and damaged inventories for disposal Less Provision for obsolete inventories, aircraft spare parts Total

The aircraft spare parts as at September 30, 2001 of Baht 2,635.28 million are depreciated at the rate of 10%, totalled Baht 263.53 million. Unused aircraft spare parts over 2 years or spare parts for non-exist aircraft in the fleet which are separated for sales within 3 years amounting to Baht 1,960.88 million are depreciated at Baht 1,458.13 million. Provision for obsolete inventories is Baht 81.08 million. Thus, total provision for obsolete inventories amounted to Baht 1,802.74 million.

3.6 Investments Consolidated (Unit : Million Baht) Name of Company 3.6.1 Investments in related parties are recorded by the equity method Associated Companies Royal Orchid Hotel (Thailand) Public Company Limited (Market value for the year 2001 amounting to Baht 562.50 million and the year 2000 amounting to Baht 540.00 million) Donmuang International Airport Hotel Company Limited Bangkok Aviation Fuel Services Public Company Limited Phuket Air Catering Company Limited Total investment in associated companies

48

Percentage of Shareholding

Investment Cost method Equity method

Incomes on investments

2001

2000

2001

2000

2001

2000

2001

2000

24 40 30.7 30

24 40 30.7 30

225.00 48.00 76.91 30.00

225.00 48.00 76.91 30.00

282.79 256.38 326.71 18.44 884.32

278.19 218.38 305.93 18.17 820.67

42.85 52.39 56.72 0.28 152.24

37.05 57.20 59.23 11.39 164.87

Consolidated (Unit : Million Baht) Name of Company 3.6.2 General investments are recorded by cost method Fuel Pipeline Transportation Limited Aeronautical Radio of Thailand Limited SITA Investment Certificate TRADESIAM Company Limited (paid 25% of registered shares) FRANCE TELECOM (EQUANT N.V.) Other Shares Less Allowance for impairment in value of investment Total general investments

Percentage of Shareholding 2001

2000

8.4 4.5 -

8.4 5.5 -

3.5

3.5

Investment Cost method Equity method 2001

2000

133.00 29.99 44.45

133.00 36.37 46.58

2001

2000

1.75 1.75 11.53 10.19 6.77 6.77 (133.00) (133.00) 94.49 101.66

Incomes on investments 2001

2000

-

-

0.05 0.05

0.06 0.06

The Company (Unit : Million Baht) Name of Company 3.6.1 Investments in related parties are recorded by the equity method Subsidiary Companies Thai Information Solution Company Limited (paid 25% of registered shares) Thai-Amadeus Southeast Asia Company Limited Total Associated Companies Royal Orchid Hotel (Thailand) Public Company Limited (Market value for the year 2001 amounting to Baht 562.50 million and the year 2000 amounting to Baht 540.00 million) Donmuang International Airport Hotel Company Limited Bangkok Aviation Fuel Services Public Company Limited Phuket Air Catering Company Limited Total Total investment in related parties 3.6.2 General investments are recorded by cost method Fuel Pipeline Transportation Limited Aeronautical Radio of Thailand Limited SITA Investment Certificate TRADESIAM Company Limited (paid 25% of registered shares) FRANCE TELECOM (EQUANT N.V.) Other Shares Less Allowance for impairment in value of investment Total general investments

Percentage of Shareholding

Investment Cost method Equity method

Incomes on investments

2001

2000

2001

2000

2001

2000

2001

2000

100 55

100 55

125.00 8.25

125.00 8.25

101.87 124.53 226.40

99.96 67.31 167.27

1.91 63.61 65.52

4.45 60.62 65.07

24 40 30.7 30

24 40 30.7 30

225.00 48.00 76.91 30.00

225.00 48.00 76.91 30.00

282.79 256.38 326.71 18.44 884.32 1,110.72

278.19 218.38 305.93 18.17 820.67 987.94

42.85 52.39 56.72 0.28 152.24 217.76

37.05 57.20 59.23 11.39 164.87 229.94

8.4 4.5 -

8.4 5.5 -

133.00 29.99 44.45

133.00 36.37 46.58

-

-

3.5

3.5

1.75 11.53 6.77

1.75 10.19 6.77

0.05

0.06

(133.00) (133.00) 94.49 101.66

0.05

0.06

The Company invested an amount of Baht 11.53 million in EQUANT N.V., registered in The Netherlands and listed in New York Stock Exchange and in Bourse de Paris. This is an investment derived from the money to be allocated back to the Company by Societe Internationale de Telecommunications Aeronautiques S.C. or SITA. SITA is the organization which provides telecommunication services to airlines all over the world with its head office in Brussels, Belgium. SITA collects expenses from its members in proportion to the use of its services. In case the revenues exceed the expenses, they will be proportionally appropriated to the Company. From 1990 to 1998, SITA has not appropriated the excess revenues which are equivalent to USD 260,000 in cash to the Company. Instead the money was invested in EQUANT N.V. The Company’s shared proportion in the investment is equal to 1,119,662 depository certificates with the value equal to the share value of the EQUANT N.V. that SITA puts on the market.

Now, SITA takes the depository certificates (EQUANT shares) to trade with FRANCE TELECOM shares in the proportion 2.2 depository certificates to 1 share. Therefore, the Company has the right in the share of FRANCE TELECOM amounted to 508,937.27 shares.

49

50

21,844.68

50.32

2,425.98

9,748.80

Building improvements

21,844.68

2,425.98

9,748.80

Building improvements

Net fixed assets

202,744.51

16,511.06

29.14 50.32

3,945.68

1,333.92

66.92

66.92

-

-

2,732.89

(636.17) 17,893.32

90.35

(0.02)

3,377.14

Buildings under leasehold

21.20

(849.62)

Land and buildings

Other plant and equipment

788.76

736.47

52.29

Increase

(3,771.83) 12,970.83

-

3,844.61

3,844.61

56,230.69

1,375.76

Sold

3,790.55

97,687.17

Carry forward

Consolidated

17,605.86

9,818.94

2,475.56

3,945.24

3,398.14

22,721.79

64,509.89

3,790.55

97,687.17

Carry forward

17,553.13

9,818.94

2,475.56

3,945.24

3,398.14

22,721.79

64,509.89

3,920.19 216,081.47

382.20

47.10

46.48

0.42

0.20

1,006.16

919.80

1,564.93 101,477.72

218.72

1,346.21

Sold

The Company

3,920.19 216,134.20

382.20

47.10

46.48

0.42

0.20

1,006.16

919.80

1,564.93 101,477.72

218.72

1,346.21

Cost for the year 2001 Adjust/Transfer Increase (decrease)

3,272.80

Revolving aircraft spare parts

Land, building and improvements

90.35

66.92

66.92

-

-

2,732.89

(636.17) 17,935.16

98,409.28

95,136.48

Brought forward

202,755.40

Aircraft under capital leases (20 Units)

overhaul of aircraft

Deferred maintenance and

Aircraft (41 Units)

Aircraft

Net fixed assets

16,521.95

29.14

3,945.68

(0.02)

3,377.14

21.20

(849.62)

Buildings under leasehold

Other plant and equipment

788.76

736.47

52.29

Increase

(3,771.83) 12,970.83

Land and buildings

Land, building and improvements

56,230.69

Revolving aircraft spare parts

3,844.61

3,272.80

3,844.61

Adjust/Transfer Increase (decrease)

Cost for the year 2001

98,409.28

95,136.48

Aircraft under capital leases (20 Units)

overhaul of aircraft

Deferred maintenance and

Aircraft (41 Units)

Aircraft

Brought forward

3.7 Property, Plant and Equipment - Net

9,769.94

1,124.90

575.94

173.35

284.53

118.06

1,821.53

2,101.13

4,146.44

643.10

3,503.34

(774.67)

5.91

4.45

3.21

-

1.24

(800.21)

(1,981.40)

1,996.58

(0.28)

1,996.86

Depreciation Adjust/Transfer Increase (decrease)

2,629.71

380.94

46.92

46.37

0.42

0.13

361.59

514.67

1,325.59

218.72

1,106.87

Sold

95,544.45

13,148.14

6,159.26

2,073.92

2,728.05

1,357.29

13,632.09

16,684.30

45,920.66

1,768.42

44,152.24

Carry forward

89,178.46

12,397.84

5,625.79

1,943.73

2,443.94

1,238.12

12,972.36

17,079.24

41,103.23

1,344.32

39,758.91

Brought forward

9,762.24

1,117.20

575.94

173.35

284.53

118.06

1,821.53

2,101.13

4,146.44

643.10

3,503.34

(774.67)

5.91

4.45

3.21

-

1.24

(800.21)

(1,981.40)

1,996.58

(0.28)

1,996.86

Depreciation Adjust/Transfer Increase (decrease)

2,629.71

380.94

46.92

46.37

0.42

0.13

361.59

514.67

1,325.59

218.72

1,106.87

Sold

95,536.32

13,140.01

6,159.26

2,073.92

2,728.05

1,357.29

13,632.09

16,684.30

45,920.66

1,768.42

44,152.24

Carry forward

Accumulated depreciation for the year 2001

89,178.89

12,398.27

5,625.79

1,943.73

2,443.94

1,238.12

12,972.36

17,079.24

41,103.23

1,344.32

39,758.91

Brought forward

Accumulated depreciation for the year 2001

4,123.68

4,123.01

482.26

1,501.74

2,139.01

8,872.31

39,151.45

57,306.06

1,928.48

55,377.58

2000

4,113.22

4,123.01

482.26

1,501.74

2,139.01

8,872.31

39,151.45

57,306.06

1,928.48

55,377.58

2000

120,545.15 113,566.05

4,413.12

3,659.68

401.64

1,217.19

2,040.85

9,089.70

47,825.59

55,557.06

2,022.13

53,534.93

2001

Property, Plant and Equipment - Net

(Unit : Million Baht)

120,589.75 113,576.51

4,457.72

3,659.68

401.64

1,217.19

2,040.85

9,089.70

47,825.59

55,557.06

2,022.13

53,534.93

2001

Property, Plant and Equipment - Net

(Unit : Million Baht)

Forty aircraft are brought forward from the fiscal year 2000. In fiscal year 2001, the aircraft is increased by two from transferring two A300-600 at a cost of Baht 1,778.45 million. One aircraft, A310-200, with a book value of Baht 239.34 million is sold at a price of Baht 346.44 million in this fiscal year. After deducting overhaul expenses of Baht 72.01 million, the Company has gains on sales of aircraft amounting to Baht 35.09 million.

Twenty-one aircraft under capital leases are brought forward from the fiscal year 2000. The Company has received two Boeing 777-300 aircraft in the year 2001. Two aircraft under capital leases have been transferred to “Aircraft Account” as the proprietary right was given to the Company. Also one Boeing 737-400 has been written off due to the caught fire aircraft on March 3, 2001 with a book value of Baht 414.73 million.

Revolving aircraft spare parts consist of aircraft engines of GE (GENERAL ELECTRIC), PW (PRATT AND WHITNEY), ROLLS-ROYCE, TEXTRON LYCOMING, and other revolving aircraft spare parts.

3.8 Advance Payments for Aircraft In the fiscal year 2000, the Company paid advance payments for Boeing 777-300 No. 5 and 6 amount of Baht 4,576.87 million.

The Company uses these aircraft by signing a temporary operating lease waiting for the loan to pay the rest of aircraft. The Company has signed a financial lease with the loaned institution in the fiscal year 2001. Therefore, these advance payments have been transferred as the cost of aircraft under capital lease.

In the fiscal year 2001, the Company pays the advance payments amount of Baht 12,971.77 million for Boeing 747-400 No. 15 and 16 amounted to Baht 6,466.95 million and Baht 6,504.82 million, respectively. The Company will sign a financial lease with the loaned institution but it cannot sign in this fiscal year. Thus, the Company has signed the temporary operating lease because it has already used these aircraft.

3.9 Loan for Investment in Aircraft Spare Parts The Company has signed a technical contract with SR TECHNICS for maintenance of MD-11 amount of USD 2.80 million.

The Company receives the interest on this loan at the rate of 6.5% per annum. The balance as at September 30, 2001 and 2000 amounted USD 0.63 million or approximately Baht 28.10 million and USD 0.87 million or approximately Baht 36.69 million, respectively.

3.10 Deferred Income Tax The temporary differences of the net book value and its tax base are as follows: (Unit : Million Baht) Consolidated

The Company

2001

2000

2001

2000

Contribution to staff pension funds

882.57

842.13

882.57

842.13

Allowance for obsoleted inventories

540.82

422.12

540.82

422.12

Allowance for doubtful debts

318.73

228.32

318.51

228.32

39.90

39.90

39.90

39.90

1,782.02

1,532.47

1,781.80

1,532.47

Allowance for impairment in value of securities Total 3.11 Short-term Loans

These are loans in the form of European commercial paper (ECP) for Boeing 747-400 No. 15 and 16 with the total value of USD 180 million or approximately Baht 8,015.53 million. The interest rates are 3.58% and 3.62375%. The Company also borrows short-term loan from THAI Employees’ Saving & Credit Coops Ltd. by issuing the promissory notes amounted to Baht 1,700 million with the interest rate of 5.25%.

The total of short-term loans are Baht 9,715.53 million.

3.12 Long-term Loans (Consolidated and the Company) (Unit : Million Baht) Loan Currency JPY

Loan Currency 2001

2000

2001

2000

-

10,000,000,000

-

3,945.94

USD

1,084,151,814

1,254,630,960

48,278.04

53,153.07

THB

2,423,458,900

3,223,458,900

Total Long-term loans Less Amount due within one year Net Long-term Loans

2,423.45

3,223.46

50,701.49

60,322.47

9,794.16

11,968.55

40,907.33

48,353.92

The Company has engaged in contractual long-term loans to purchase 20 aircraft. In the fiscal year 2001, total loans amounted to Baht 50,701.50 million comprises Baht 8,609.47 million from foreign loans with the interest rate of 3.69% - 6.91% per annum and Baht 42,092.03 million from domestic loans with the interest rate of 4.07% - 9.50% per annum.

51

3.13 Obligations Under Capital Leases (Consolidated and the Company) (Unit : Million Baht) Loan Currency

Loan Currency 2000

2001

2000

53,597,560,069

2001

28,223,280,792

20,084.13

11,136.74

USD

766,578,116

863,314,900

34,136.26

36,574.77

FRF

84,739,137

114,292,655

528.04

653.83

JPY

DEM

-

8,410,694

Present value of obligations under capital leases Less Amount due within one year Net Long-term Loans

54,748.43

161.19 48,526.53

9,926.81

5,955.57

44,821.62

42,570.96

The Company has contractual agreement with option to buy with 14 foreign financial institutions. The accounting policy for recording aircraft under capital leases is described in Note 2.6. In the fiscal year 2001, there are 20 aircraft left constituting the Company obligations under capital leases for the payment due in 2001 - 2012 totalled Baht 64,805.64 million. After deducting the due interest of Baht 10,057.21 million, the present value of obligations under capital leases is Baht 54,748.43 million.

3.14 Promissory Notes The Company is loaned from Government Saving Bank and THAI Employees’ Saving & Credit Coops Ltd. by issuing promissory notes with floating interest rate computed by using six-month fixed deposit interest rate of Government Saving Bank plus 2.9% - 3.0% per annum.

Such issuances are to compensate the payment of aircraft B747-400 No. 14 and aircraft A330-300 No. 12. The brought forward balance is Baht 10,526.00 million and repays during the period amounted to Baht 1,076.00 million, leaving the balance amount of Baht 9,450.00 million (loaned from Government Saving Bank amount of Baht 5,850.00 million and THAI Employees’ Saving & Credit Coops Ltd. amount of Baht 3,600.00 million). As at September 30, 2001 these promissory notes are transferred to debts due within one year amounting to Baht 1,050.00 million, leaving the long-term liabilities balance at Baht 8,400.00 million.

3.15 Concessions to Reduce Cost of Aircraft The Company has the rights to receive concessions under contracts for acquisition of aircraft and engines. The balance as at September 30, 2000 amounting to USD 119.99 million or approximately to Baht 5,083.53 million, a transfer in this fiscal year to reduce cost of aircraft as described in Note No. 2.5.

3.16 Share Capital On December 12, 2000 the Company has decreased its registered share capital that had not been issued amounted to 200 million shares at Baht 10 per share with the value of Baht 2,000 million. The Company has listed to increase its new registered shares capital on December 13, 2000 amounted to 300 million shares at Baht 10 per share with the value of Baht 3,000 million to public offering in accordance with the Resolution of Extraordinary Shareholders’ Meeting No. 1/2543 held on October 25, 2000. The total value of the Company’s registered shares capital is up to Baht 17,000 million.

3.17 Legal Reserve At the end of the year 2000, the Company’s legal reserve balance amounted to Baht 1,032.78 million. In the fiscal year 2001, the net profit is lower than the accumulated deficit brought forward. Therefore, the Company did not have to provide its legal reserve, following Section 116 of the Public Companies Act. 3.18 Dividends Accrued dividends for the Company amount of Baht 26.92 million as at September 30, 2001 are dividends for which certain shareholders have not yet cashed their checks and also dividends of certain shareholders whom the registrar cannot contact.

52

3.19 Other Activities The results of other activities of the Company are as follows: (Unit : Million Baht) Revenues

Expenses

2001

2000

1,281.10

Domestic catering & restaurant Limousine services

Catering Services

Ground handling and services to air carriers Sales on board

2000

2001

2000

1,246.52

292.43

308.25

988.67

938.27

464.83

430.37

255.68

265.32

209.15

165.05

199.71

151.80

226.01

192.15

(26.30)

(40.35)

4,380.13

4,156.32

1,588.12

1,246.58

2,792.01

2,909.74

113.06

101.65

5.52

7.31

107.54

94.34

-

3.34

-

6.91

-

2.90

Agent distribution Services

-

Thai Shop

9.81

Total

Profit (Loss)

2001

6,448.64

21.06 6,107.72

2,374.67

2,022.95

4,073.97

17.72 4,084.77

Profits from other activities do not include any distribution cost from general and administration expenses such as depreciation, interest and loss on exchange rate, etc.

3.20 Other Incomes (Unit : Million Baht) Consolidated Revenue from insurance compensation Gains on sales of assets Revenue from investment

The Company

2001

2000

2001

51.96

25.92

51.96

2000 25.92

216.12

766.11

216.12

766.11

0.05

0.06

0.05

0.06

Other incomes

537.02

303.22

535.66

303.22

Total

805.15

1,095.31

803.79

1,095.31

3.21 Other Expenses (Unit : Million Baht) Consolidated

The Company

2001

2000

2001

2000

Bad and doubtful debts

323.18

(10.48)

322.44

(10.48)

Credit card fees

244.35

194.84

244.35

194.84

Compensation to customers for damages

104.31

83.82

104.31

83.82

Expenses for grounded aircraft

1.36

0.94

1.36

Allowance for impairment in value of investment

-

133.00

0.94

-

133.00

Other expenses

152.22

1,059.70

152.22

1,059.66

Total

825.42

1,461.82

824.68

1,461.78

3.22 Lease Aircraft The Company signed operating leases with foreign companies for 18 aircraft with lease terms of 10-11 years. The Company has an obligation to pay the lease over the lease term totalling USD 1,388.08 million or approximately Baht 61,811.96 million.

53

3.23 Results of Operations The results of the Company’s operations for the year 2001 as compared to 2000 are summarized as follows: (Unit : Million Baht) The Company 2001

2000

Increase (Decrease)

Traffic

122,417.24

106,269.80

Others

6,448.64

6,107.72

340.92

128,865.88

112,377.52

16,488.36

Traffic

114,429.26

95,577.56

18,851.70

Others

2,374.67

2,022.95

351.72

116,803.93

97,600.51

19,203.42

Traffic

7,987.98

10,692.24

(2,704.26)

Others

4,073.97

4,084.77

(10.80)

12,061.95

14,777.01

(2,715.06)

443.43

375.16

68.27

65.52

65.07

0.45

152.24

164.87

(12.63)

Operating Revenues

Total

16,147.44

Operating Expenses

Total Operating Profit

Total Other Revenues Interest income Share of net profit(loss) from subsidiary companies Share of net profit from associated companies Other income

803.79

1,095.32

(291.53)

1,464.98

1,700.42

(235.44)

Interest expenses

7,598.72

6,837.67

761.05

Losses on exchange rate

3,913.01

3,300.81

612.20

66.17

56.91

9.26

824.68

1,461.78

(637.10)

12,402.58

11,657.17

745.41 (3,695.91)

Total Other Expenses

Pension fund interest Other expenses Total

1,124.35

4,820.26

Less Income tax

Profit before income tax

832.18

103.43

728.75

Profit before extraordinary item

292.17

4,716.83

(4,424.66)

Extraordinary item

1,636.35

Net profit for the year

1,928.52

-

1,636.35

4,716.83

(2,788.31)

The results of the Company’s operations for the year 2000 were adjusted with the effect of change in accounting policies.

3.24 Extraordinary item On Saturday March 3, 2001 Thai Airways International Boeing 737-400 aircraft, flight TG 114, parked at Domestic Terminal, Bangkok International Airport waiting for passengers on board and was scheduled to depart from Bangkok to Chiang Mai had exploded and caught fire. The incident resulted in a total loss of the aircraft. The aircraft had a book value amounted to Baht 414.73 million and was under an obligation of capital lease to repayment amounted to Baht 600.37 million. In this fiscal year, the Company received the compensation from the insurance company for the total amount of Baht 2,162.88 million. The Company has gain from the insurance company of Baht 1,636.35 million after deducting the book value of the aircraft amounted of Baht 414.73 million and the termination of loan amounted of Baht 111.80 million.

3.25 Cash and Cash Equivalents Cash and cash equivalents in statement of cash flows consist of: (Unit : Million Baht) Consolidated

The Company

2001

2000

2001

2000

Cash and bank balances

6,596.02

9,450.17

6,444.07

9,358.89

Short-term investments - fixed deposit

2,817.32

4,115.27

2,715.57

3,978.04

(1,385.62)

(2,168.17)

(1,385.62)

(2,168.17)

8,027.72

11,397.27

7,774.02

11,168.76

Less fixed deposit over 3 months Total

54

3.26 Staff Pension Fund (Consolidated and the Company) The Company has established its staff pension fund by monthly contributing 10% of its employees’ salaries to the fund. The Company presents assets, liabilities and fund balance in the Company’s balance sheet. Interest and expenses arising from the fund operation are recognized as income and expenses of the Company. The details are as follows: (Unit : Million Baht) 2001

2000

Cash and bank balances

1,965.49

83.81

Short-term investments

1,385.63

3,031.76

Fixed assets Other current assets Other current liabilities Pension fund

0.05

0.07

14.54

13.96

3,365.71

3,129.60

15.64

14.26

3,406.83

3,171.02

3,422.47

3,185.28

As at September 30, 2001 the fund balance is Baht 3,406.83 million which equals to the Company’s obligation to pay to its staff.

3.27 Calculation of Taxable Gains or Losses on Foreign Currency Exchange The Company calculated gains or losses on foreign currency exchange rate to pay corporate income tax for the period ended in or after July 2, 1997 according to the No. 2 (1) of the Revenue Department Order No. 72/2540 dated July 24, 1997. In this fiscal year, the Company has calculated the right on gains or losses on foreign currency exchange rate to comply with the said announcement, especially a part which benefits its tax base in the fiscal year 2001, and records as deferred income tax instead of recording in retained earnings. As a result, accumulated deficit decreases by Baht 1,053.16 million.

3.28 Contingent Liabilities The Company has contingent liabilities resulting from the following commitments: (Unit : Million Baht) The Company 2001 Letters of guarantee issued by banks Letters of credit

2000

3.82

7.93

92.62

-

The Company as defendant in Labour dispute cases

28.22

8.56

Damage claims cases

603.94

443.93

Cases relating to aircraft accident which are under the insurance company’s liabilities at Nepal in 1992

83.01

26.13

-

114.16

811.61

600.71

at Surat Thani in 1998 Total

In the fiscal year 2001, the case relating to aircraft accident in Surat Thani province in 1998 is finished.

3.29 THAI’s Plane Crashed in Surat Thani THAI’s plane crashed in Surat Thani province on December 11, 1998. The cost of the damage from the aforesaid case has so far not been able to be estimated. Before the end of September 30, 2001 the Company has advanced Baht 406.09 million and received compensation amounting to Baht 413.39 million from the insurance company. The majority of these expenses is under the insurance company’s liabilities.

55

De t a i l s o f S h a r e h o l d e r s a n d B o a r d o f D i r e c t o r s Thai Airways International Public Company Limited

Thai Airways International Public Company Limited, aviation transportation service and associated activities, head office being 89 Vibhavadi Rangsit Road, Ladyao, Chatuchak, Bangkok 10900, Thailand.

Authorised Share Capital : 1,700 million ordinary shares at 10 Baht per share totalling 17,000 million Baht Shares Issued and Paid Up Share Capital : 1,400 million ordinary shares fully paid at 14,000 million Baht Ordinary Shareholders Portfolio of Thai Airways International Public Company Limited at September 30, 2001 Amount of Shares Held in One Portfolio

Number of People Holding Each Portfolio

%

Total Shares

%

98,428

99.15

23,121,174

1.65

1-1,000 1,001-10,000 10,001-1,000,000 1,000,000-plus Thai citizens holding shares Others

798

0.80

1,842,682

0.13

39

0.04

1,194,200

0.09

4

0.01

1,373,841,944

98.13

99,269

100.00

1,400,000,000

100.00

97,752

98.47

1,356,674,902

96.90

1,517

1.53

43,325,098

3.10

99,269

100.00

1,400,000,000

100.00

Board of Directors’ Shareholders Portfolio and Remuneration for Fiscal Year 2001 Board of Directors

Number of Shares

Mr. Chai-Anan Samudavanija

Chairman

Mr. Srisook Chandrangsu Mr. Somchainuk Engtrakul

Annual Welfare Fee (Baht)

-

52,083.33

Vice Chairman

100

101,736.11

Vice Chairman

-

89,818.55

ACM Pong Maneesilpa

Vice Chairman

-

89,818.55

Mr. Soonthorn Pokhachaiyapat

Vice Chairman

-

46,875.00

Mr. Thanong Bidaya

Vice Chairman

-

42,809.14

Mr. Mahidol Chantrangkurn

Former Chairman

100

14,583.33

Mr. Suphachai Phisitvanich

Former Vice Chairman

100

22,681.45

ACM Sanan Tourtip

Former Vice Chairman

-

22,681.45

ACM Nipon Sakornyen

Former Director

-

58,333.33

Mr. Bundit Siripant

Former Director

100

58,333.33

Mr. Sumet Tantivejkul

Former Director

100

58,333.33

Gen. Kongsak Wantana

Former Director

400

28,629.03

Mr. Poonsup Piya-anant

Former Director

-

58,333.33

Mr. Wisudhi Srisuphan

Former Director

-

58,333.33

Pol.Gen. Narongvich Thaitong

Former Director

-

20,161.29

ACM Terdsak Sujjarak

Former Director

-

15,120.97

Mr. Thamnoon Wanglee

Former Director and Secretary

Gen. Mongkon Ampornpisit

Director

-

Mr. Wissanu Krea-ngam

Director

100

75,000.00

Mr. Sansern Wongcha-um

Director

-

100,000.00

Mr. Suchart Traiprasit

Director

100

75,000.00

Pol.Gen. Pornsak Durongkavibulya

Director

-

79,838.71

Mr. Somchai Boonnamsiri

Director

-

41,666.67

Mr. Chartsiri Sophonpanich

Director

-

41,666.67

-

41,666.67

800

79,838.71

M.L. Subhasiddhi Jumbala

Director

Mr. Bhisit Kuslasayanon

Director and Secretary

56

1,000

20,161.29 75,000.00

List of Affiliated and Subsidiary Companies Name and Address 1. Royal Orchid Hotel (Thailand) Public Company Limited

Percentage of Shareholding

Type of Business

24.0%

Hotel

40.0%

Hotel

30.7%

Fuel Storages and filling

2 Captain Bush Lane, Siphya Road, Bangkok 10500, Thailand

2. Donmuang International Airport Hotel Company Limited 333 Chert Wudthakas Road, Don Muang, Bangkok 10210, Thailand

3. Bangkok Aviation Fuel Services Public Company Limited 171/2 Vibhavadi Rangsit Road, Don Muang,

for aircraft at the airport

Bangkok 10210, Thailand

4. Phuket Air Catering Company Limited

30.0%

Air Catering

100.0%

Information technology services

55.0%

Distributor of computer

41/33 2nd Floor, Montri Road, Phuket 83000, Thailand

5. Thai Information Solutions Company Limited 89 Vibhavadi Rangsit Road, Ladyao, Chatuchak, Bangkok 10900, Thailand

6. Thai-Amadeus Southeast Asia Company Limited 89 Vibhavadi Rangsit Road, Ladyao, Chatuchak, Bangkok 10900, Thailand

services, flight reservation and other travel-related services

57

B oard of Directors Thai Airways International Public Company Limited (Acting) As at September 30, 2001

58

Mr. Chai-Anan Samudavanija

Mr. Srisook Chandrangsu

Chairman

Vice Chairman

Director Vajiravudh College

Permanent Secretary Ministry of Transport and Communications

Mr. Thanong Bidaya

Gen. Mongkon Ampornpisit

Vice Chairman

Director

Economic Advisor to the Prime Minister Office of the Prime Minister

Chairman New Bangkok International Airport Company Limited

Pol.Gen. Pornsak Durongkavibulya

Mr. Somchai Boonnamsiri

Director

Director

Commissioner-General Royal Thai Police

Chairman Wall Street Tullet & Tokyo Limited

Mr. Somchainuk Engtrakul

ACM Pong Maneesilpa

Mr. Soonthorn Pokhachaiyapat

Vice Chairman

Vice Chairman

Vice Chairman

Permanent Secretary Ministry of Finance

Commander-in-Chief Royal Thai Air Force

Counsellor at Law Chaiyapat Law Office

Mr. Wissanu Krea-ngam

Mr. Sansern Wongcha-um

Mr. Suchart Traiprasit

Director

Director

Director

Secretary-General to the Cabinet The Secretariat of the Cabinet

Secretary-General National Economic and Social Development Board

Attorney-General Office of the Attorney-General

Mr. Chartsiri Sophonpanich

M.L. Subhasiddhi Jumbala

Mr. Bhisit Kuslasayanon

Director

Director

Director and Secretary

President Bangkok Bank Public Company Limited

Chief Financial Officer Asia Freewill Company Limited

Company Advisor Thai Airways International Public Company Limited

59

Ma n a g e m e n t T e a m Thai Airways International Public Company Limited As at September 30, 2001 Mr. Somchainuk Engtrakul

Mrs. Chamarie Chitwattanagorn

Sqn.Ldr. Chamlong Poompuang

Acting President

Vice President

Vice President

Human Resources Department

Aviation Personnel Development Department

Mr. Kobchai Srivilas

Mr. Doosdee Smuthkochorn

Vice President

Acting Vice President

Line & Light Maintenance Department

Government Relations Department

Finance & Information Department

Wg.Cdr. Supachai Limpisvasti

Mr. Vasing Kittikul

and Acting Vice President

Vice President

Vice President

Comptroller Department

Heavy Maintenance Department

Sales & Distribution Department

Mr. Tasnai Sudasna Na Ayudhaya

Sqn.Ldr. Udomchai Nandamanop

Mr. Sutat Rattakunjara

Executive Vice President

Vice President

Vice President

Commercial Department

Flight Operations Department

Product Development &

Lt.Jg. Chusak Bhachaiyud

Mr. Wichit Yuktadatta

Executive Vice President

Vice President

Mrs. Sumalee Nakorntap

Technical Department

Inflight Customer Services Department

Vice President

Mr. Suthep Suebsantiwongse

Mr. Chanchai Singtoroj

Executive Vice President

Vice President

Mr. Prasert Lipiwathana

Customer Services Department

Marketing Planning Department

Vice President

Sqn.Ldr. Pradith Vudhivate

Mr. Veravat Chotiros

Executive Vice President

Vice President

Operations Department

Marketing Development & Support Department

M.R. Supadis Diskul

and Acting Senior Vice President

Vice President

Mr. Prajak Jamrusmechoti

Corporate Planning & Government

Special Project Department

Executive Vice President

Relations Department

Overseeing Bangkok Aviation

Mr. Bhisit Kuslasayanon Company Advisor

Mr. Amnuay Chanya Executive Vice President

Management Department

Special Project Department

Special Project Department

Human Resources & General Administration Department

Overseeing Star Alliance

Fuel Services Public Company Limited

Mr. Kaweepan Raungpaka

and Fuel Pipeline Transportation Limited

Vice President

Flg.Off. Chinawut Naressaenee

Corporate Finance Department

Senior Vice President Standards and Safety Assurance Department

Mr. Prasert Khlongwathanakith

Vice President

Mrs. Sangngun Pornpaiboonstid

Special Project Department

Vice President

Overseeing Information Technology

Corporate Planning Department

Mr. Tummasak Chutiwong

Vice President Subsidiaries & Investments Department

60

Flt.Lt. Sukasem Nuangwang

Mr. Apichart Danaivan

Vice President

Vice President

Crisis Management &

General Administration Department

Information Center Department

T hai On-line Offices ATHENS, GREECE

TKT/RSVN : (30-1) 9692-022

KATHMANDU, NEPAL

: (977-1) 223-565

STOCKHOLM, SWEDEN

32 EL.VENIZELOU, 166 75 GLYFADA,

FAX

: (30-1) 9692-686

ANNA PURNA ARCADE, P.O. BOX 12766,

RSVN

: (977-1) 221-247

KUNGSGATAN 66, S-111 81, STOCKHOLM,

FAX

: (08) 5988-3690

ATHENS, GREECE

e-mail

: thai-nat@thaiairways.gr

DURBAR MARG, KATHMANDU, NEPAL

FAX

: (977-1) 225-084

SWEDEN

e-mail

: management@thaiairways.se

e-mail

: thai@ntc.net.np

AUCKLAND, NEW ZEALAND

TKT

TKT/RSVN : (64-9) 377-3886

TKT/RSVN : (08) 5988-3600

SYDNEY, AUSTRALIA

TKT

: (61-2) 9844-0929

22 FANSHAWE STREET, KPMG LEGAL BUILDING, FAX

: (64-9) 379-8597

KUALA LUMPUR, MALAYSIA

TKT/RSVN : (60-3) 201-1913

75-77 PITT STREET, SYDNEY,

FAX

: (61-2) 9844-0936

AUCKLAND, NEW ZEALAND

: aklaa@thaiair.co.nz

WISMA GOLDHILL, 67 JALAN RAJA CHULAN,

RSVN

: (60-3) 201-2900

NEW SOUTH WALES 2000, AUSTRALIA

RSVN

: (61-2) 9844-0999

50250 KUALA LUMPUR, MALAYSIA

FAX

: (60-3) 202-5805

FAX

: (61-2) 9251-1106

e-mail

BANDAR SERI BEGAWAN, BRUNEI

TKT/RSVN : (673-2) 242-991-3

KOMPLEK JALAN SULTAN

FAX

51-55 JALAN SULTAN, BANDAR SERI BEGAWAN, e-mail

e-mail

: thai@po.jaring.my

e-mail

: sydaa@thaiairways.com.a

KUNMING, PEOPLE'S REPUBLIC OF CHINA

TKT

: (86-871) 313-3315, 313-3139

TAIPEI, TAIWAN

TKT

: (886-2) 2509-6899 ext.1

KING WORLD HOTEL, 98 BEIJING ROAD,

RSVN

: (86-871) 313-3139, 313-3315

CHIEN KUO NORTH ROAD, SEC.1,

FAX

: (886-2) 2509-2931

KUNMING 650011,

FAX

: (86-871) 316-7351

TAIPEI, TAIWAN

RSVN

PEOPLE'S REPUBLIC OF CHINA

e-mail

: kmgaatg@public.km.yn.cn

: (673-2) 242-871 : thaiair@brunet.bn

BS 8811 BRUNEI DARUSSALAM BEIJING, PEOPLE'S REPUBLIC OF CHINA

TKT/RSVN : (86-10) 6460-8899

BEIJING LUFTHANSA CENTER S 102 B,

FAX

: (86-10) 6460-6990

NO. 50 LIANG MA QIAO ROAD,

e-mail

: bjstg@public.east.cn.net

BEIJING 100016, PEOPLE'S REPUBLIC OF CHINA BRISBANE, AUSTRALIA

TEL

: (07) 3215-4700

LEVEL 4, 145 EAGLE STREET, BRISBANE,

FAX

: (07) 3215-4737

QUEENSLAND 4000, AUSTRALIA

e-mail

: petercullen@thaiairways.com.au

CALCUTTA, INDIA

TEL

: (91-33) 287-0276

CRESCENT TOWER, 229 A.J.C. BOSE ROAD,

TKT/RSVN : (91-33) 280-1630-35

CALCUTTA 700020, INDIA

FAX

: (91-33) 280-1640

e-mail

: tgsales@vsnl.com

: (886-2) 2509-6800

FAX

: (886-2) 2508-4910

e-mail

: tpeaatg@ms29.hinet.net

LONDON, UNITED KINGDOM

TKT

41 ALBERMARLE STREET, LONDON, WIS 4BF,

RSVN

: (0870) 606-0911

TOKYO, JAPAN

UNITED KINGDOM

FAX

: (44-20) 7409-1463

1-5-1, YURAKUCHO, CHIYODA-KU,

FAX

: (81-3) 3593-3323

e-mail

: thaitickets@aol.com

TOKYO 100-0006, JAPAN

e-mail

: tyoaa@thaiair.co.jp

TKT

: (1-310) 640-0097

VIENTIANE, LAOS

(AREA CODE) : (007-856-21)

RSVN

: (1-310) 640-0097

LOS ANGELES, U.S.A. 222 NORTH SEPULVEDA BLVD., SUITE 1950, EL SEGUNDO, CA 90245, U.S.A.

: (44-20) 7491-7953

ext. 260/259 ext. 258/257

TKT/RSVN : (81-3) 3593-0521

M&N BUILDING, LUANGPRABANG ROAD,

TKT/RSVN : 222-527-9

KHOUNTA THONG, VIENTIANE,

FAX

: 216-143, 219-563

LAO PEOPLE'S DEMOCRATIC REPUBLIC

e-mail

: thai@laonet.net

FAX

: (1-310) 606-5418

MADRID, SPAIN

TKT

: (34-91) 782-0523-24

1101 SAKURA TOWER,

FAX

: (95-1) 255-490

RSVN

: (34-91) 782-0521-22

339 BOGYOKE AUNG SAN STREET,

e-mail

: thaiair.rgn@mptmail.net.mm

KYAUKTADA 11182, YANGON, MYANMAR

YANGON, UNION OF MYANMAR

COLOMBO, SRI LANKA

TKT/RSVN : (94-1) 307-100-8

PRINCIPE DE VERGARA 185, 28002 MADRID,

JAIC HILTON TOWER, 200 UNION PLACE,

FAX

: (94-1) 307-109

SPAIN

COLOMBO 2, SRI LANKA

e-mail

: cmbaatg@mega.lk

COPENHAGEN, DENMARK

TKT/RSVN : (45-33) 750-120

RAADHUSPLADSEN 16, DK-1550,

FAX

COPENHAGEN V, DENMARK

e-mail

TKT/RSVN : (95-1) 255-499

FAX

: (34-91) 564-5620

e-mail

: reservations@thaiairways.es ZURICH, SWITZERLAND

TKT/RSVN : (41-1) 215-6500

MANILA, PHILIPPINES

TKT

: (63-2) 840-4235

BAHNHOF STRASSE 67/SIHLSTR 1,

FAX

: (41-1) 212-3408

: (45-33) 750-180

COUNTRY SPACE 1 BUILDING,

FAX

: (63-2) 893-5891

8023 ZURICH, SWITZERLAND

e-mail

: administration@thaiair.ch

: ss@thai-airways.dk

SEN GIL J.PUYAT AVENUE, MAKATI CITY,

RSVN

: (63-2) 816-7017

PHILIPPINES

FAX

: (63-2) 817-4044

BANGKOK, THAILAND

DANANG, SOCIAL REPUBLIC OF VIETNAM

TKT/RSVN : (84-511) 656-060

HEAD OFFICE

TEL

: (02) 545-1681-6, (02) 545-3685-9

DANANG INTERNATIONAL AIRPORT,

FAX

: (84-511) 656-062

MELBOURNE, AUSTRALIA

TKT/RSVN : (03) 8662-2215

89 VIBHAVADI RANGSIT ROAD,

FAX

: (02) 545-3832

SOCIALIST REPUBLIC OF VIETNAM

e-mail

: thaiairways.kk@dng.vnn.vn

250 COLLINS STREET, MELBOURNE,

FAX

: (03) 9650-7003

BANGKOK 10900

VICTORIA 3000, AUSTRALIA

e-mail

: marieb@thaiairways.com.au SILOM OFFICE

TEL

: (02) 234-3100, (02) 232-8000

TEL

: (089) 975-94672

485 SILOM ROAD, BANGKOK 10500

FAX

: (02) 233-1465, (02) 237-4114

LARN LUANG OFFICE

TKT

: (02) 280-0100-110

6 LARN LUANG ROAD, BANGKOK 10110

FAX

: (02) 280-1748

DELHI, INDIA

TKT/RSVN : (011) 623-9988

THE AMERICAN PLAZA, HOTEL PARKROYAL,

FAX

: (011) 623-9149

MUNICH, GERMANY

NEHRU PLACE, NEW DELHI 110019, INDIA

e-mail

: delaltgl@vsnl.net

MODULE B, ROOM B4355A,

TKT/RSVN : (089) 975-94670

85356 MUNICH AIRPORT, GERMANY

FAX

: (62-361) 288-063

NAGOYA, JAPAN

TKT/RSVN : (81-52) 963-8585

RSVN

: (02) 628-2000

: thaidps@indosat.net.id

SOUTH HOUSE 9F 6-29 NISHIKI 3-CHOME,

FAX

: (81-52) 963-8584

FAX

: (02) 628-0111

NAKA-KU, NAGOYA 460-0003, JAPAN

e-mail

: charoenchai@thaiair.co.jp

OSAKA, JAPAN

TKT

: (06) 6202-5470

SUMITOMO SEIMEI YODOYABASHI BUILDING, FAX

: (06) 6202-5646

4-1-21 KITAHAMA, CHOU-KU,

RSVN

: (06) 6202-5161

YAOWARAJ OFFICE

TEL

: (02) 223-9746-48

OSAKA 541-0041, JAPAN

FAX

: (06) 6202-5453

ROOM NBR. 310-311, 3RD FLOOR,

FAX

: (02) 223-9750

GRAND CHINA BUILDING,

DENPASAR, INDONESIA

TKT/RSVN : (62-361) 288-141

THE GRAND BALI BEACH HOTEL,

FAX

HANG TUAH STREET, SANUR, BALI, INDONESIA e-mail DHAKA, BANGLADESH

TKT/RSVN : (880-2) 831-4711-18

BSL COMPLEX, MINTO ROAD, DHAKA 1000,

FAX

: (880-2) 832-2353

TKT

: (971-4) 269-0766

BANGLADESH DUBAI, U.A.E. NO.1 BU HALEEBA PLAZA,

RSVN

MURAGGABAT ROAD, DEIRA P.O. BOX 13142,

FAX

: (971-4) 266-5498

DUBAI, U.A.E.

e-mail

: dxbaatg@emirates.net.ae

: (971-4) 268-1701

: (089) 975-94676

ASIA HOTEL OFFICE

TEL

: (02) 215-2020-4

296 PHAYATHAI ROAD, BANGKOK 10400

FAX

: (02) 215-2021

e-mail

: bhudhisarn@thaiair.co.jp

PARIS, FRANCE

TKT

: (33-1) 4420-7070

23 AVENUE DES CHAMPS ELYSEES,

FAX

: (33-1) 4420-7049

CHIANG MAI, THAILAND

TKT

: (053) 210-210, 210-041

75008 PARIS, FRANCE

RSVN

: (33-1) 4420-7080

240 PRAPOKKLAO ROAD, AMPHOE MUANG,

RSVN

: (053) 211-044-7

CHIANG MAI 52000, THAILAND

FAX

: (053) 211-541

CHIANG RAI, THAILAND

TEL (A/P)

: (053) 711-179

FAX

: (053) 713-663

215 YAOWARAJ ROAD, BANGKOK 10100

FRANKFURT, GERMANY

TKT

: (49-69) 9287-4446

BOERSENPLATZ 13-15, 60313 FRANKFURT,

RSVN

: (49-69) 9287-4444

FAX

: (33-1) 4420-7037

GERMANY

FAX

: (49-69) 9287-4222

e-mail

: tongnoi.thongchua@thaiairways.fr

e-mail

: sakchai.s@thai-airways.de : (007-604) 226-7000

870 PHAHOLYOTHIN ROAD,

FUKUOKA, JAPAN

TKT/RSVN : (092) 734-6409

WISMA CENTRAL 41 JALAN MACALISTER,

RSVN

: (007-604) 226-6000

CHIANG RAI 57000, THAILAND

HINODE BUILDING, 15-1, TENJIN,

FAX

: (092) 734-9480

10400 PENANG, MALAYSIA

FAX

: (007-604) 226-9000

CHUO-KU, FUKUOKA SHI, 810-0001 JAPAN

e-mail

: waravan@thaiair.co.jp

e-mail

: thaipen@po.jaring.my

PENANG, MALAYSIA

GUANGZHOU, THE PEOPLE'S REPUBLIC OF CHINA

PERTH, AUSTRALIA : (86-20) 8382-1218

TKT

TKT/RSVN : (61-8) 9488-92002/01

GARDEN HOTEL, 368 HUANSHI DONG RU,

TEL

LEVEL 30, QV1 BUILDING,

FAX

: (61-8) 9488-9260

GUANGZHOU 510064,

TKT/RSVN : (86-20) 8382-4333

250 ST GEORGE'S TERRACE, PERTH,

e-mail

: anon.j@thaiairways.com.au

THE PEOPLE'S REPUBLIC OF CHINA

FAX

: (86-20) 8382-3986

WA 6000, AUSTRALIA

e-mail

: thaican@public.guangzhou.gd.cn PHNOM PENH, CAMBODIA

TKT

: (855-23) 214-360

PHITSANULOK, THAILAND

TEL

: (055) 258-020

209/26-28 BOROMTRILOKNART ROAD,

FAX

: (055) 251-671

HAT YAI, THAILAND

TKT

: (074) 230-445-6

190/6 NIPAT UTHIT 2 ROAD, HAT YAI,

RSVN

: (074) 233-433

SONGKHLA 90110, THAILAND

FAX

: (074) 233-114

PHITSANULOK 65000, THAILAND

HANOI, VIETNAM

TKT/RSVN : (84-4) 826-7921-22

SUITE A15-A16, REGENCY SQUARE,

RSVN

: (855-23) 214-361

PHUKET, THAILAND

TKT

: (076) 258-236

44 B LY THUONG KIET STREET, HANOI,

FAX

: (84-4) 826-7394

294 M.V. MAO TSE TOUNG,

FAX

: (855-23) 214-369

78 RANONG ROAD, AMPHOE MUANG,

FAX

: (076) 258-233

SOCIALIST REPUBLIC OF VIETNAM

e-mail

: tghanoi@hn.vnn.vn

PHNOM PENH 12306,

e-mail

: thaiair@bigpond.co.kh

PHUKET 83000, THAILAND

RSVN

: (076) 258-237

FAX

: (076) 216-776

KINGDOM OF CAMBODIA HO CHI MINH CITY, VIETNAM

TKT/RSVN : (84-8) 829-2809-10,

65 NGUYEN DU STREET, DISTRICT 1,

822-3365

ROME, ITALY

TKT

: (06) 4781-3329

KRABI, THAILAND

TEL

: (075) 622-440-2

50 VIA BARBERINI, 00187 ROME, ITALY

RSVN

: (06) 4781-3304

39 TUNG FAH ROAD, AMPHOE MUANG,

FAX

: (075) 622-443

FAX

: (06) 474-6449

KRABI 81000, THAILAND

e-mail

: manit@thaiair.it PATTAYA, THAILAND

TEL

: (038) 420-995-97

SEOUL, KOREA

TKT

: (02) 3707-0033

DUSIT RESORT PATTAYA HOTEL,

FAX

: (038) 420-998

ORIENTAL CHEMICAL BUILDING,

FAX

: (02) 3707-0055

240/2 PATTAYA BEACH ROAD,

RSVN

: (02) 3707-0011

CHON BURI 20130, THAILAND

FAX

: (02) 755-5251 KHONKAEN, THAILAND

TEL

: (043) 227-701-05

HOTEL SOFITEL RAJA ORCHID KHONKAEN,

FAX

: (043) 227-708

HO CHI MINH CITY,

FAX

: (84-8) 822-3465

SOCIALIST REPUBLIC OF VIETNAM

e-mail

: thaiairways.aa.@hcm.vnn.vn

HONG KONG

TKT

: (852) 2876-6899

MANAGEMENT & ACCOUNTS : 15-B FLOOR,

FAX

: (852) 2735-8551

SALES, TKTG & RSVN : 24-A FLOOR,

RSVN

: (852) 2876-6888

UNITED CENTRE, QUEENSWAYS,

FAX

: (852) 2865-6037

50 SOKONG-DONG, CHUNG-KU 100-070,

HONG KONG

e-mail

: hkgaa@thaiairways.com.hk

SEOUL, KOREA

e-mail

: thaisel@netsgo.com

JAKARTA, INDONESIA

TKT

: (62-21) 230-2551

GROUND FLOOR, BDN BUILDING,

RSVN

: (62-21) 230-2552

SHANGHAI, THE PEOPLE'S REPUBLIC OF CHINA

JL. M.H. THAMRIN NO. 5, JAKARTA 10340,

FAX

: (62-21) 330-792**

SHANGHAI CENTRE,

TKT

: (86-21) 6279-7175

AMPHOE MUANG, KHONKAEN 40000,

INDONESIA

e-mail

: jktaatg@attglobal.net

1376 NAN JING ROAD, SHANGHAI,

FAX

: (86-21) 6279-7179

THAILAND

THE PEOPLE'S REPUBLIC OF CHINA 200040

RSVN

: (86-21) 6248-7766

FAX

: (86-21) 6248-8144

KAOHSIUNG, TAIWAN

TKT/RSVN : (88-67) 215-5871

NO. 282, CHUNG-HUA ROAD, KAOHSIUNG,

FAX

: (88-67) 251-4081

TAIWAN, R.O.C.

e-mail

: thaikhh@ms23.hinet.net

KARACHI, PAKISTAN

TKT/RSVN : (92-21) 566-0156

HOTEL METROPOLE, CLUB ROAD,

FAX

: (92-21) 568-1513

KARACHI, PAKISTAN

e-mail

: khiaatg@cyber.net.pk

9/9 PRACHASAMRAN ROAD,

UBON RATCHATHANI, THAILAND

TEL

: (045) 313-340-2

364 CHAYANGGOON ROAD,

FAX

: (045) 313-344

SINGAPORE

TKT

: (65) 224-2024

AMPHOE MUANG,

100 CECIL STREET, # 03-00 THE GLOBE,

RSVN

: (65) 224-9977

UBON RATCHATHANI 34000, THAILAND

SINGAPORE 069532

FAX

: (65) 223-9005

e-mail

: thaiair@pacific.net.sg

61

Thai Airways International Public Company Limited 89 Vibhavadi Rangsit Road, Bangkok 10900, Thailand Telephone : 66 (0) 2513-0121 Facsimile : 66 (0) 2513-0203 62 www.thaiairways.com