Thai Airways rehabilitation ahead of schedule

Thai Airways expects to exit its rehabilitation plan ahead of schedule. The airline is already looking for new aircraft as the recovery in global tourism bolsters earnings.

CEO Chai Eamsiri said Thursday that the carrier will be able to leave its court-supervised debt plan “much earlier” than the late-2024 target, according to Bloomberg. The company is also in talks with plane makers including Boeing for long-term acquisitions of new aircraft to modernise its fleet, he said.

Revenue will grow by at least 40% this year, said Chai, who was promoted to CEO at the start of the month. Mired in US$5.3 billion (150 billion baht) of debt, the Thai Airways rehabilitation plan has already enforced painful cost cuts including halving its workforce and downsizing its fleet by about 40%.

But with global tourism springing back to life faster than expected as the world moves on from pandemic restrictions, Thailand has seen its position as a major travel destination accelerate since the second half of last year. To cope, Thai Airways plans to bring back into service some aircraft it previously aimed to sell.

Chai told a press conference…

“Thai Airways earnings will enjoy another year of excellent growth, with the return of Chinese travellers adding to an already hot market for air travel. We have met most conditions in the debt plan quite quickly, and now begins our long-term growth program that includes new plane procurement and fleet modernisation.”

Thai Airways has been in talks with plane makers over the addition of about 20 twin-aisle passenger jets, Bloomberg News reported in December. Those discussions include ones with Boeing over the acquisition of 787-9 wide-body aircraft.

Thai Prime Minister Prayuth Chan-o-cha now expects foreign-tourist arrivals to exceed 30 million in 2023, though other government agencies still forecast about 25 million. In any case, international visitors will far exceed last year’s tally of just over 11 million.

The airline is still in talks with creditors and investors about plans for debt-to-equity conversion and additional share sales, two key conditions for improvement of equity capital, said Chai, declining to specify timing. The airline had a negative-equity base of more than 70 billion baht (US$2 billion) as of September 30.

The Thai Airways rehabilitation plan required regulatory approval to increase its registered capital to 337 billion baht (US$10 billion) from 21.8 billion baht by issuing new stock, it said in November. The airline, which has more than 30 billion baht of cash, is also in no rush for new loans of about 25 billion baht that are specified in the debt-restructuring plan.