“No liquidity crunch” – Thai Airways’ President

PHOTO: Sumeth Damrongchaitham, Thai Airways’ President

“Deputy PM says the rehabilitation plan had been implemented for a while now, but there was still no sign of the losses easing.”

The President of national flagship carrier Thai Airways International is denying reports that it is experiencing a liquidity crunch.

Sumeth Damrongchaitham claims that Thai Airways has sufficient cash flow “for present and future operations”. He is denying reports that the airline is in trouble or experiencing a liquidity shortage. Sumeth added that the management has given top priority to maintaining liquidity and has drawn up a loans plan on the “most prudential basis”.

The Nation reports that, as of the end of June this year, the national airlines’ revolving credit line accounted for 13.4% of the total projected revenue for the year.

“This indicates that the carrier still has adequate cash reserve in hand.”

This week Deputy PM Thaworn Senniam said he will hold a meeting with the airlines’ management on October 10 to seek ways to clear the national carrier’s accumulated losses. The minister said the meeting will discuss Thai Airways’ existing rehabilitation plan which he does not believe will help the carrier succeed in a turnaround. Thaworn says the rehabilitation plan had been implemented for a while now, but there was still no sign of the losses easing. He believes Thai Airways will first have to revise the plan within three months.

Thai Airways directors asked executives of the national carrier to review plans to procure 38 more aircraft worth a combined 156 billion baht, two weeks ago. The governing board instead cited a “fast-changing situation” in asking for a fresh plan within the next six months.

Recently Sumeth said that Thai Airways operations will not be affected by its board’s demand for the review of plans to procure the new aircraft.

According to the Thai Airways second-quarter 2019 filing to the Stock Exchange of Thailand, the airline and its subsidiaries had total revenue of 42.509 billion baht, a 10% decrease year on year.

For the second quarter Thai Airways and its subsidiaries had one-time expenses that included impairment loss of assets and aircraft in the amount of 172 million baht. The gain on foreign currency exchange was 522 million baht, mainly from balance sheet revaluation. Consequently, Thai Airways and its subsidiaries reported the net loss of 6.878 billion baht, compared to the loss of 3.086 billion baht over the same period last year.

SOURCE: The Nation