Thai Airways Files For Bankruptcy Protection; Agrees To Rehabilitation Plan

Daniel Fowler
May 19, 2020

Thailand's national carrier, Thai Airways International PCL (Thai Airways), has made a decision to enter rehabilitation, making it the latest victim of the tourism decline brought about by the COVID-19 pandemic.

Prior to this, the Thai government initially offered a rescue bailout to the national carrier to the sum of 58.1 billion baht (~RM7.9 billion).

Governments worldwide have devoted more than US$85 billion (S$121 billion) to propping up airlines after the coronavirus pandemic wiped out travel demand and grounded fleets.

Colombia's Avianca Holdings SA and Virgin Australia Holdings Ltd have filed for bankruptcy protection since the pandemic broke out.

Thai Airways was under financial pressure even before the coronavirus outbreak caused passenger numbers to plummet. The airline has reported losses every year since 2012, with the exception of 2016, when it actually got back in the black.

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Thai Airways logged losses of 12 billion baht ($374.3 million) in 2019, 11.6 billion baht ($361.9 million) in 2018 and 2.11 billion baht ($65.8 million) in 2017.

"The State-Enterprise Planning Office agreed in principle for the rehabilitation of Thai Airways in court ... the procedure will be submitted to cabinet tomorrow", government spokeswoman Narumon Pinyosinwat said, according to the Reuters report. "The airline will continue to operate", Prime Minister Prayuth Chan-ocha told reporters at a news briefing.

"Holders of Thai Airways' bonds are watching closely for details of its rehabilitation plan", Thiti Tantikulanan, senior executive vice president of Kasikornbank Pcl, said at a seminar.

Currently, Thai Airways is operating reparation flights to bring Thais home and cargo flights for transporting agriculture produce to help Thai farmers.

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