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Thai Airways to lay off 30% of its staff

Jack Burton

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Thai Airways to lay off 30% of its staff | The Thaiger
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“THAI will stop repaying all debt and start from scratch.”

The government announced today that Thai Airways will have to dismiss more than 6,000 employees after entering into receivership proceedings and a debt moratorium of 200 billion baht. The Cabinet decided to push Thai Airways into a bankruptcy procedure under the Bankruptcy Act and ordered the Ministry of Finance to relinquish their majority stake in the airline, thus stripping it of its state-enterprise status and enabling the proceeding under civil law.

A spokesman said the troubled national flag carrier, which racked up billions of baht in losses for years, will “stop repaying all debt and start from scratch”. 30% of its more than 20,000 employees, or some 6,000 people, are to be dismissed. They will receive 10 months salary as compensation as per the Thai labour laws.

Sources say the ‘rehabilitation’ of the airline could take at least one year. The bankruptcy must be declared in the US as well as in Thailand to avoid planes being seized or other asset forfeiture.

Yesterday it was reported that Airbus were chasing repayments for some of the leased planes. But today Airbus denied local reports that it had notified the airline of debts the struggling carrier owes for 30 rented aircraft, according to Nation Thailand.

The 53 Airbus aircraft used by Thai Airways includes six Airbus A380-800,12 A350-900s, 15 A330-300s and 20 A320-200s.

SOURCE: Nation Thailand

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Jack Burton is an American writer, broadcaster, linguist and journalist who has lived in Asia since 1987. A native of the state of Georgia, he attended the The University of Georgia's Henry Grady School of Journalism, which hands out journalism's prestigious Peabody Awards. His works have appeared in The China Post, The South China Morning Post, The International Herald Tribune and many magazines throughout Asia and the world. He is fluent in Mandarin and has appeared on television and radio for decades in Taiwan, Mainland China, Hong Kong and Macau.

4 Comments

4 Comments

  1. Avatar

    Michael Lewis

    May 21, 2020 at 7:42 pm

    A company that gas more Chiefs than Indians was bound to hit the deck sooner or later. Lets hope the 6000 redundances are the pencil roller chiefs who wrecked the company.

  2. Avatar

    MJ

    May 22, 2020 at 11:27 am

    The only way to get back to Business is to sweep the stairs from up to down.
    The Top positions must be Business men. It will not work with a Pilot or Government people in the Top Management.
    Wish them Good Luck

  3. Avatar

    Mr D G Apswoude-Director, Australian Investment & Development proprietary l.

    May 22, 2020 at 5:50 pm

    Thai airways was, and still is, a Thai Government-non private-run airline that operated under strict Thai Govt direction achieved maximum financial benefit to the Thai travel and tourism industries for past twenty years in generating income of 20% of a 30 Trillion Thai Baht GDP per year. That’s correct-around 100 trillion baht was underwritten by an airline who’s sole aim was to benefit Thai travel and tourism, with a secondary Business plan to try to make a profit or limit losses. Now it’s employees, management, and creditors are told that Thai Government will not honour anything and will seek to act as a corporate entity going forward. This may very-well bring all of Thailand and it’s business community into disrepute. The “Road to perdition” is about to be travelled Thai-duly elected Government, the consequences may permanently damage Thailand and it’s perception by the world at large. Staff losing life savings does not=LOS .

  4. Avatar

    Peter mccann

    May 23, 2020 at 10:12 am

    Have I lost my credit for flights

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Politics

Government to provide more financial aid to small and medium-sized businesses

Jack Burton

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Government to provide more financial aid to small and medium-sized businesses | The Thaiger
PHOTO: Vivaldi PR

Thailand’s Ministry of Finance has been tasked with coming up with plans for additional financial aid to small and medium-sized enterprises affected by the Covid-19 crisis. Government Spokesperson Narumon Pinyosinwat made the announcement yesterday.

“The Ministry of Finance will estimate the budget to be used as well as the loan limit and interest rate, and will present to the Cabinet again in the next meeting.”

A source told Nation Thailand the ministry’s survey revealed that SME operators, who couldn’t get loans at the height of the crisis, were mostly those who had never applied for a loan before and so had no record of their repayment ability. They were refused loans to avoid risk. Furthermore, some SMEs were rejected loans because their status was listed under “non-performing loans,” even though they still have the capacity to continue operating.

The source says the Ministry of Finance has assigned the Office of Small and Medium Enterprises Promotion to come up with measures tailored specifically to help SMEs in the above 2 groups, such as providing loans from the OSMEP’s fund instead of relying on financial institutions. The measures are expected to be ready by the end of July.

SOURCE: Nation Thailand

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Business

4 new board members for THAI restructure, 1 has airline experience

The Thaiger

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4 new board members for THAI restructure, 1 has airline experience | The Thaiger

Four new board members for Thai Airways are the face of hope for the national airline as it addresses massive losses and restructuring. The airline’s business is now being addressed under the country’s Bankruptcy Act.

Piyasvasti Amranand, Pirapan Salirathavibhaga, Boontuck Wungcharoen and Pailin Chuchottaworn have joined the Thai Airways executive board. Piyasvasti served as the airline’s president from June 2009 to June 2012.

The four board members were hand-picked by Thai PM Prayut Chan-o-cha, who said he needed “trustworthy people” to help guide the national airline to a more profitable future.

Last week the Thai cabinet approved a plan for the 60 year old airline to enter a court-sanctioned restructuring scheme under the country’s bankruptcy law. The plan for Thai Airways to borrow 54 billion baht to stay afloat in another government ‘bail out’ was met with widespread opposition, from government ministers, prominent businesspeople and social media. The airline has accumulated debts of 244 billion baht. The Covid-19 pandemic has also grounded most of its fleet, massively compounding the airlines’ already complex problems.

Also last week, the Stock Exchange of Thailand listed airline informed the SET that the Finance Ministry had sold 3.17% of its majority shareholding in the airline to the state-backed Vayupak Fund on May 22. This reduced the ministry’s stake from 51.03% to 47.86% control, stripping Thai Airways of its status as a state enterprise, providing more scope for the new board to restructure the airline and seek private financial assistance.

But the government technically retains a majority stake in the airline if the shares of the Finance Ministry, Vayupak Fund and Government Savings Bank are combined.

2 days ago the PM appointed a 9 member committee to handle the restructuring plan for the ailing airline, chaired by trusted sidekick Deputy PM Wissanu Krea-ngam. The other members are mostly state officials, including the permanent secretaries of the Finance, Transport and Justice ministries as well as the secretary-general of the Securities and Exchange Commission. The four additional board members will help draw up a restructuring plan for the airline.

But critics are warning of potential built-in pitfalls stemming from numerous conflicts of interest. There is no ‘aviation’ expertise and the “jobs for the boys” criticism will not go away with the new board. They all have impressive backgrounds as senior executives in the private and public sectors.

The airline was already swimming in debt when one of the new board members, Piyasvasti Amranand, became Thai Airways president in 2009. He cut costs at the time by slashing salaries and jobs and reducing unnecessary expenditure. At the same time he was the person responsible for locking the airline into a major aircraft acquisition and starting up the subsidiary Thai Smile – originally meant to be competition for regional low-cost carriers but eventually morphed into a domestic offshoot for Thai Airways leaving the parent company mostly with the international routes.

The other new board members are all politically connected with Prayut and have served in his cabinets or as political advisors. They have all had extensive public service experience heading up multiple Thai enterprises.

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Business

No role for Transport Ministry in Thai Airways rehab plan

Maya Taylor

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No role for Transport Ministry in Thai Airways rehab plan | The Thaiger
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After initially insisting on having a say in the management of the rehabilitation plan for the beleaguered Thai Airways, the Ministry of Transport has conceded that, with its holding in the airline reduced to less than 50%, it no longer has any jurisdiction over what is now a listed public company.

Deputy Transport Minister Thaworn Senneam says the struggling carrier is no longer a state organisation under its control and administration of the court-approved rehabilitation plan now sits with the Finance Ministry.

Thai PBS World reports that both ministries had clashed over who would oversee the plan as, until filing for bankruptcy protection, the airline was both a listed public company with the Finance Ministry as its largest shareholder, and a state enterprise under the Transport Ministry.

The Transport Ministry had hoped to recommend 4 people as members of a “super board” that would oversee the administration of the airline’s rehabilitation plan, with other members to be nominated by the Finance Ministry.

The jockeying for position of the ‘super board’ has already begun with prominent names publicly putting themselves forward.

SOURCE: Thai PBS World

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