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Thai Airways to end its Samui flights this September

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PHOTO: planespotters.net

Thai Airways is scrapping its Bangkok-Samui flights from September this year. The airline’s been flying Bangkok to Samui, return, twice a day in a Boeing 737 carrying up to 149 passengers.

It negotiated a contract with Bangkok Airways to fly the two flights into Koh Samui, which built and manages the island’s airport since 2008.

At the time, the national airline said it would be convenient for travellers flying though Bangkok on Thai Airways to to transfer to a TG flight to the island, booking through the one airline.

It was also considered a breakthrough at the time ending a monopoly on the Bangkok-Samui flight sector. Bangkok Airways dominates the route offering around 19 flights daily each way.

Thai Airways are justifying cancelling the service this September following the signing of a codeshare agreement with Bangkok Airways last year. The airline can ticket its European or Asian passengers through to Samui using any of the Bangkok Airways daily flights at agreed fares that are competitive for TG to resell.

The monopoly for Bangkok Airways means that flights cost up to more than double for similar distance routes around the region.

Samui Island’s airport was developed as the first privately owned airport, but faced constant criticism from hoteliers on the island who claimed Bangkok Airways made it difficult for competitors to serve the island.

At one point the government threatened to build a second airport on the island, but land appropriation costs were too high. However, the tactic did result in THAI gaining landing rights for two flights daily.

According to Airlineroute’s timetable information, Thai Airways will end its TG281 service that departs Bangkok at 0745 and TG 287 that departs Bangkok at 1530 on 2 September.

 

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Business

Thailand’s airlines call for meeting with PM to discuss soft loans

Maya Taylor

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PHOTO: Flickr/Ferry Octavian

The Thai Airlines Association says 7 member airlines are pushing for a meeting with PM Prayut Chan-o-cha to discuss the option of soft loans. The carriers have been seeking this financial aid for some time and have even decreased the amount being asked for, from 24 billion baht last year to 14 billion now.

The Bangkok Post reports that representatives from Thai AirAsia, Thai AirAsia X, Bangkok Airways, Nok Air, Thai Smile Airways, Thai Lion Air, and Thai Vietjet Air want to meet the PM to discuss what progress, if any, has been made on the matter. Wutthipong Prasartthong-osod from the TAA says the loans would give the carriers the support they desperately need at this time, with the association also putting the request in writing.

The airlines previously met with the PM last August to discuss the proposal, with the TAA pointing out the situation has worsened considerably since then. The ongoing third wave of Covid-19 has led to a reduction in flights, which has had a significant impact on revenue.

In addition, carriers are struggling to meet the ongoing costs of operating flights and paying workers. The association says the provision of soft loans would cushion the impact and help domestic tourism. It is also calling on the government to vaccinate airline staff, given that they are frontline workers in the tourism sector.

The Bangkok Post reports that in February, the Finance Minister, Arkhom Termpittayapaisith, was hesitant in his response to the call for soft loans, with the Export-Import Bank of Thailand asked to come up with some form of financial assistance for the airlines. According to Arkhom, providing soft loans or bringing such lending under the Public Service Account would mean his ministry having to take responsibility for the difference between market interest and soft loan interest.

SOURCE: Bangkok Post

 

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Thailand

Thai Airways debt restructuring vote pushed back to next week

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Photo via Wikimedia

The vote on Thai Airways International’s debt restructuring plan has been postponed and rescheduled for next week. The national airline needs the plan to be approved by more than 50% of creditors to move forward with the bankruptcy proceedings.

The airline’s total liabilities stack up more than 300 billion baht. With flight suspensions over the past year brought on by travel restrictions to prevent the spread of Covid-19, Thai Airways lost 141 billion baht last year.

Thai Airways has proposed a 3-year freeze on the loan repayments as well as a 6-year delay on bond repayments. The airline is also pushing to have unpaid interest on loans waived.

Debtholders discussed the plan during a video conference today and decided to delay the vote, a legal advisor to Thai Airways told reporters. Back in March, Thailand’s Finance Minister, which is the airline’s largest shareholder, had implied that they back the debt restructuring plan. An attorney representing the creditors had also said many favoured the proposed restructuring.

SOURCE: Bloomberg

 

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Thai Airways’ creditors to vote on rehab plan today

Maya Taylor

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PHOTO: Pixabay

Today is D-Day for Thai Airways, with 13,000 creditors voting on whether or not to accept the struggling airline’s rehabilitation plan. According to a Bangkok Post report, a source at the airline has warned that should creditors reject the plan, the carrier will be declared bankrupt and they would only receive 12.9% of what they’re owed.

In the event of a bankruptcy declaration, the airline’s assets will be appraised to decide how much of its debts can be repaid. The estimate of 12.9% is based on the value of assets currently held by the carrier.

The Bangkok Post reports that the rehabilitation plan which was submitted in March covers debts of around 410 billion baht. It’s understood major shareholders own around 180 billion baht of that debt between them. Should the rehab plan be accepted today, it’s likely Thai Airways will be given a certain timeframe in which to turn itself around.

The plan calls for the repayment period of debts arising from unsecured bonds worth 70 billion baht to be extended to 10 years, with a debt moratorium in the early stages of repayment. The airline is also introducing tough cost-cutting measures, including job reductions via early retirement for thousands of its 20,000 workers.

It’s understood the plan does not call for the Ministry of Finance to provide a loan but says anyone can obtain the loan and the ministry can help with cash injection negotiations. The State Enterprise Policy Office has already stated that the government will not re-capitalise the airline.

SOURCE: Bangkok Post

 

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