05 May, 2020

Last chance for Thai Airways as government builts rescue package

Thai Airways International has one last chance of survival, Thailand's Prime Minister has warned as the government was preparing a rescue and restructuring plan for the beleaguered airline.

The global slump in the demand for air travel because of the ongoing coronavirus COVID-19 outbreak has hit Thai Airways hard, forcing the carrier to ground 69 of its 82 aircraft from the end of March until the end of June. The airline has continued to operate charter, cargo and repatriation flights during the crisis and the state of emergency that authorities declared throughout the country. 

Prayuth Chan-ocha said reorganising and restructuring the airline would be extremely challenging and the workforce would have to be reduced and warned there were no second chances for the airline.  “This is an enterprise that we have to rehabilitate and this is the last chance we have to manage the issue so it does not get worse,” he confirmed at a press conference this week. 

Thai Airways had approached the government - its largest shareholder, for a loan of around THB58 billion, roughly £1.48 billion guaranteed by the Ministry of Finance to keep the airline operating as cash was fast running out and would have, according to local media, been exhausted by June 7th.

The Thai Airways Union confirmed it would cooperate with a “clear plan” to rehabilitate the airline, yet was fearful of outside influences.  As the carrier is mostly owned by the state, all big decisions need approval from a number of government agencies and departments, which the Union says could lead to far more influence from other outside parties. Many local commentators still believe the order for Being 787 Dreamliner aircraft was more a political decision than a business-driven one.

Whilst the full package and further details of the fleet reduction and scale of job losses has yet to be revealed, it's understood that around a third of the fleet would be retired and further announcements will only be made after the deal has been put to the cabinet. 

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