|Thai Airways To Restructure In Bankruptcy Court With Rehab Plan Photo: Wikimedia|
From news earlier, the Thai Government has confirmed that it will go to bankruptcy court to submit a rehabilitation plan for its flag carrier, Thai Airways International.
A senior Thai official confirmed to Reuters that the airline will be filing for bankruptcy similar to Chapter 11 in the United States.
Thai Airways to file for bankruptcy after green lighted by SEPO
— Thai Enquirer (@ThaiEnquirer) May 18, 2020
Thai ministers were discussing plans to save the flag carrier last week although the final decision is made by the cabinet.
Thailand’s Finance Minister, Uttama Savanayana, has already said that the government could be open to the option of THAI filing for bankruptcy.
|This decision will replace the previous rescue plan Photo: Thai Airways|
The confirmation of Thai bankruptcy will replace the previously planned business rescue plan. The previous plan involves the flag carrier seeking a 58.1 billion baht ($1.8 billion) loan guaranteed by the government.
However, after this declaration of bankruptcy, the Thai Government will now extend its previously guaranteed loan for the survival of the flag carrier.
|Thai Airways has over $2.87 billion in debt Photo: Getty|
Thai Airways has reported consistent annual losses every year after 2012, except in 2016. The airline is suffering badly after the outbreak of corona virus, similar to majority of other airlines.
The flag carrier currently has over 92 billion baht ($2.87 billion) in debt, of which $677 million should be repaid this year.
|The airline have not announced a detailed rehabilitation plan Photo: Wikimedis|
The rehabilitation plan for the airline have not been detailed as of now. However, a rehabilitation plan, in which the airline is a 51% shareholder, could be brought into effect by an order from the bankruptcy court.
Thailand has been in a State of Emergency since mid-April due to widespread of the corona virus halting most international flights.
|The new plan will involve cutting down the long-haul fleet Photo: Getty|
The restructuring of the flag carrier under the government rehabilitation plan will involve cutting down the airlines long-haul fleet size. This will also mean job losses within the airline.
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