The Thai government has confirmed suspicions that Thai Airways is beginning bankruptcy proceedings.
On Monday, 18 May, Reuters reported that Thailand plans to take a rehabilitation plan for Thai Airways to the bankruptcy court. A key government panel has backed the undisclosed plan. It is now due for consideration by the Thai cabinet on Tuesday.
“The State-Enterprise Planning Office agreed in principle for the rehabilitation of Thai Airways in court … the procedure will be submitted to cabinet tomorrow,” government spokeswoman Narumon Pinyosinwat told the media outlet.
“It is similar to filing Chapter 11 in the United States,” she said, adding that details of the rehabilitation plan have not been discussed.
Thai Airways just days earlier had released a statement regarding its seeking of government assistance over bankruptcy proceedings.
“Thai Airways International Public Company Limited has clarified that it has no intention to file for bankruptcy, responding to rumours appeared in the news and online about the consensus of its board of directors meeting on 15 May 2020 to file for bankruptcy,” it said.
“THAI’s reform plan has been approved by THAI Board of Directors on 17 April 2020 and presented to the State Enterprise Policy Office for consideration on 29 April 2020. The plan will soon be presented to the cabinet for further action. The board of directors had no resolution of filing for bankruptcy as appeared in the news.
“THAI again denies the bankruptcy rumours.”
“Time has run out, Thai Airways must change,” Thailand’s Finance Minister Uttama Savanayana said in a statement last week to the Bangkok Post. “Conventional practices cannot continue. There must be a massive overhaul.”
Thai was already struggling before pandemic shut down commercial aviation as we know it, THAI’s losses over the past three years have amounted to $778 million. According to the Bangkok Post, its debt amounts to $2.88 billion, of which approximately 78 per cent is owed to bond investors. Any restructuring would likely also include a reduction in the size of THAI’s mixed Boeing and Airbus 75 aircraft fleet.
The airline does not have any aircraft on order so has not had to renegotiate deals or orders in a small saving grace for the carrier.