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Bankruptcy Court approves Thai Airways debt restructuring plan

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The Central Bankruptcy Court approved Thai Airways International’s debt restructuring plan.  An official says the approval is just a “tiny step” in the process estimated to take years. With the approval, the international airline company can now start discussions with debt holders.

The 60 year company is reportedly facing its biggest challenge: bankruptcy during a global pandemic with international travel mostly in ‘pause’ mode. At the end of June, the company’s total liabilities added up to 332.2 billion baht. Thai Airways also defaulted on loans and bonds, adding up to a total of 85 billion baht, according to the company’s July statement.

The airline reported a net loss of 28 billion baht for the first half of the year. Flights were cancelled in April to follow Covid-19 prevention measures.

The administrators, appointed by Thai Airways, say that the rehabilitation process could take 7 years. Approval of the debt rehabilitation plan is just a “tiny step,” according to chief executive officer of PricewaterhouseCooper’s Thai unit Chanchai Chaiprasit.

“It’s an uphill task to come up with a debt plan that would satisfy banks, aircraft lessors, suppliers and other lenders.”

Airlines across the world took a hit from the coronavirus pandemic. Many were forced to suspend flights, lay off staff and seek financial support from governments and investors. Singapore Airlines cut 20% of their workforce. Other airlines have also sought bankruptcy protection.

In addition to taking care of their debt, Thai Airways is also being accused of corruption. The Ministry of Transport pointed out underpricing of tickets and excessive overtime costs.

SOURCE: Bangkok Post

 

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2 Comments

2 Comments

  1. Ron

    Monday, September 14, 2020 at 3:24 pm

    Unless they are allowed to lay-off at least 20% of the work force, management included, it won’t work.

    • Toby Andrews

      Tuesday, September 15, 2020 at 3:32 pm

      They are not going to pay. All they will pay is airport taxes and fuel, just enough to keep aircraft flying.
      They have defaulted on 85 billion baht. They owe 332.2 billion baht.
      Will not pay 31 billion to passengers whom they refused to fly, and yet they still fly.
      The administrator are employed by Thai airways so they will do as their told or be fired.
      They are losing money despite having a monopoly on Thai repatriation flights, and any foreigners that will pay big quarantine and insurance costs to visit Thailand. These Thai flights are top price.
      Their are many countries Thai airways will not visit, for fear their aircraft will be seized for debt.
      They will keep the cash cow going even though they will run at a loss, in order that management and others can keep milking the dying cow.
      Debt restructuring means in thai, we will not pay.

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Caitlin Ashworth is a writer from the United States who has lived in Thailand since 2018. She graduated from the University of South Florida St. Petersburg with a bachelor’s degree in journalism and media studies in 2016. She was a reporter for the Daily Hampshire Gazette In Massachusetts. She also interned at the Richmond Times-Dispatch in Virginia and Sarasota Herald-Tribune in Florida.

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