Plans to create a new national airline to replace the struggling Thai Airways are meeting oppositions from the employee union. The union insists that Thai Airways is a known brand worldwide and has contributed significantly to the economy of Thailand and deserves aid and rehabilitation.
In the past, Thailand’s flagship international airline spent years as a state-owned property until the Thai Ministry of Finance reduced it’s majority stake to only 47% in 2020. The Finance Minister says that they are not discussing taking over Thai Airways as a government-owned carrier again. So the future of the airline will depend on the current long list of creditors.
Formed in cooperation with Scandinavian Airlines in 1960 to create Thailand’s first international airline, The government eventually bought out SAS. But now the Finance Ministry reduced their ownership in order to make Thai Airways eligible for debt rehabilitation. The airline is now seeking assistance through the Central Bankruptcy Court to help with the over 300 billion baht of debt the airline is currently holding.
The workers union has been pushing the government not to give up on the distressed airline, and to support debt-restructuring in hopes that Thai Airways can surge back after Covid-19 stronger than ever. The union argues that while the industry outlook is still bleak during the pandemic, the airline can still cut operating costs, streamline operations, and focus on profit-generating sectors of the business. Ground services, cargo logistics, and aircraft repair can still generate revenue and help Thai Airways fight to stay afloat.
The union argues that pulling the plug on Thai Airways and forming a new national airline would be counterproductive as the airline industry during the pandemic would not allow a new company to thrive.
The International Air Transport Association has predicted a global loss of about 1.47 trillion baht (US $47.7 billion) for the airline industry this year. This is actually an improvement over last year’s losses of nearly 4 trillion baht (US $126.4 billion) at the global peak of Covid-19 lockdowns. While an estimated 2.4 billion people are expected to fly this year, with government travel restrictions and tight border controls, a further US $81 billion in losses are still predicted for the airline industry.
SOURCE: Bangkok Post
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