The restructuring plan to tackle Thai Airways International’s more than 300 billion baht debt, one of Thailand’s most high profile bankruptcy cases, was approved by the airline’s creditors, its legal advisor told Reuters reporters this afternoon.
The plan was approved by 90% of the creditors. It will be reviewed by the Central Bankruptcy Court on May 28. In a previous report, the head of Thailand’s Finance Ministry, the airline’s largest shareholder, said they support the plan.
Last year, Thai Airways filed for bankruptcy protection and debt restructuring when the airline had a record loss of 141 billion baht (following a decade of massive losses). Several people from the airline were accused of mismanagement and corruption that led to the massive losses.
The national carrier was heavily criticised for its decision back in 2004 to purchase 10 Airbus A340 aircraft for 100 billion baht. The costs for maintenance and fuel for the wide-bodied passenger jets were high and led Thai Airways to lose money on every flight. Purchasing the aircraft was only part of the problem… there were also many discrepancies in the procurement of the Rolls Royce jet engines for these planes as well.
To help the airline take off again amid the Covid-19 pandemic, the national carrier plans to cut half its workforce and sell property, as laid out in the restructuring plan. Reports say the airline is aiming to raise 50 billion baht in new capital. The airline had also proposed a 3 year freeze on loan payments and a 6 year deferment on bond repayments.
Air industry pundits still predict plenty of turbulence ahead for Thailand’s national airline.
SOURCE: Bangkok Post
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Great news. Let’s do it again
A NATIONAL EMBARRASSMENT! Just watch … in another year everything will still be the same! Pssst… has no one mentioned to them, nobody is flying anywhere soon because we have a bout of the flu!!!
An astonishing decision.the government refuses to back the reasonable soft loan requests by the pre crisis profitable private sector carriers yet agrees to shovel yet more tax payers money into this bottomless money pit that has been insolvent for years and can never be returned to profit.
I have to wonder if there is a deliberate plan here to eliminate the private sector completely and return things to the pre deregulation days when thai had a virtual monopoly on international and domestic flights.
This remarkable decision is not in the interests of the thai tax payer or anybody else.
Be interesting to see if they now provide flights or refunds to the 1000’s of passengers they are owing them to.i won’t be hold my breath that’s for sure.truly amazing thailand!
I would love to see the whole cost saving plans to support this decision. Of course they can cut staff by 50% and of course they can lose some of the accommodation dotted around expensive parts of Bangkok. The real fun will be in seeing how they intend to improve productivity having removed 50% of their staff. I have seen many companies show massive savings by reducing staff numbers on their balance sheets, only to inflate costs by outsourcing much of their work. Then of course there’s the question over transparency of payments and perks to staff. It would be great to have a few days to look through the details. Somehow I don’t think any of that will be published?.
Big Surprise…not!
As I told my friends, after seeing THAI [stock] closed around +29% on its last trading day, that there are people who knows something and are buying this penny stock.
But I am happy though, sitting with quite a few 100K mileage points that I might get a chance to use now.
No surprise here, except, I thought a rehab plan of this kind must be approved by ALL creditors. Oh well, re-reading the Bankruptcy Act will be a fun thing to do this afternoon.
All looks a bit shady… personally I would just like the €1200 euro they owe me for my cancellation last year. They said at the time they would refund. I have seen nothing. They are going to have to do something quite amazing to turn this dog of an airline around. Many would not fly on them no matter what the price.
I’m selling shares in the Titanic if anyone is interested,