“Thai Airways will survive”. Emergency meeting next Wednesday.

“Thai Airways will not collapse. The fact that Deputy PM Somkid stepped in to handle the issue means the government will rescue it.”

It’s no secret that Thailand’s national carrier has been a financial basket case for over a decade, bleeding money and marketshare as the years pass. The top-heavy Thai company is bailed out by the Thai government each year with continual demands for restructure and business plans that never appear to address the airlines’ fundamentally-flawed management structure.

Thai staff put together their own video (below).

Now the fate of the national carrier may finally be decided in a meeting next week chaired by PM Prayut Chan-o-cha. The government will attempt to decide the fate of the ailing carrier in a meeting of the State Enterprise Policy Commission on Wednesday, with the possibility of a shareholder restructuring to help the ailing airline stay afloat. With the Government seeking to cut budgets from all departments due to the financial impact of the Covid-19 crisis, the annual burden of bailing out the national carrier has become more acute.

The meeting will decide the conditions and scope of rehabilitation for the bruised and battered airline. The airline has continually been told to sort out its unwieldy middle-management, ageing fleet and fare structure. The airline has been stuck with a 1990s national airline model whilst newer, more nimble, better financed and managed airlines, with younger fleets and management styles, have flown straight past the legacy airline.

Deputy PM Somkid Jatusripitak yesterday called urgent talks with Transport Minister Saksayam Chidchob and Finance Minister Uttama Savanayana to discuss whether the national flagship carrier should remain a state enterprise under the Transport Ministry, or be privatised.

Saksayam told reporters that a future share structure was not discussed at that meeting, but hinted that Thai executives had been assigned to draw up plans to resurrect the company from years of financial woes before the crucial meeting.

Faith, or the lack thereof, in Thai Airways has captured headlines in recent months, with Covid-19 battering the already financially struggling airline.

Due to coronavirus outbreak, Thai was forced to enact furloughs and slash salaries. There have been unsubstantiated reports that private businesses with deep pockets might become significant new shareholders.

To quash those rumours, Somkid reportedly stepped in on Thursday and established an ad-hoc panel to find ways to revive the 60 year old carrier after a report that the Finance Ministry will have the Government Savings Bank and state-owned Krung Thai Bank’s Vayupak fund will acquire more shares.

The Ministry of Finance currently owns 51.03% of the shares, leaving 15.12% with the Vayupak 1 fund and 2.13% with the Government Savings Bank, according to Bangkok Post.

Deputy Transport Minister Thavorn Senniam says one potential plan is to have the Finance Ministry reduce its shares, allowing the Vayupak fund to increase its stake. He believes with the Vayupak fund as a major shareholder, Thai Airways will be forced to operate more efficiently like other SET-listed companies.

Thavorn ruled out rumours that private investors will become major shareholders.

“This direction is impossible as it tantamount to privatising the national carrier.”

Thavorn says other options include requesting more funding, the issuance of corporate bonds or a capital increase. He says financial experts will know which path is best for Thai to prevent it from making further losses.

“Only the PM and the cabinet can decide on the shareholder issue, but regardless of the restructuring, Thai will survive.”

SOURCE: Bangkok Post