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‘Last chance’ plan for THAI Airways, warns Prayut

‘Last chance’ plan for THAI Airways, warns Prayut

THAILAND: Prime Minister Prayut Chan-o-cha has said the financially-ailing Thai Airways International Plc (THAI) will be given one last chance to turn itself around.

transport
By Bangkok Post

Wednesday 6 May 2020, 09:06AM


THAI Airways has suffered huge financial losses for years, with a B12 billion deficit confirmed last year. Photo: Bangkok Post

THAI Airways has suffered huge financial losses for years, with a B12 billion deficit confirmed last year. Photo: Bangkok Post

Gen Prayut stressed the need for its executives and union members to work together to steer the distressed flag carrier out of its problems, calling it a “matter of life or death” for the company and its employees.

“I gave THAI five years to fix the problems, but it still has not succeeded,” he said after a cabinet meeting yesterday (May 5).

Gen Prayut said the latest rehabilitation plan will be THAI’s last chance to ensure its financial situation does not get worse, before noting that restructuring the national carrier’s organisational structure will be a challenge.

THAI first entered business rehabilitation five years ago, as approved by the State Enterprises Policy Committee (SEPC).

While the government seemed committed to helping THAI once more, Gen Prayut said the carrier’s rehabilitation plan was not discussed at yesterday’s cabinet meeting.

Transport Minister Saksayam Chidchob said yesterday the plan was not tabled before yesterday’s meeting because the SEPC has yet to send the latest rehabilitation plan to the ministry.

He added the ministry is currently working on a concrete action plan to stop THAI from going under.

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The SEPC approved THAI’s latest rehabilitation plan last Wednesday (Apr 29).

The committee, chaired by Gen Prayut, assigned a financial consultant to work out a recovery blueprint to be submitted to THAI’s executive board. Central to the plan is a loan to essentially bail out the company.

A source at Government House said the plan comprises network, fleet, commercial, operation, cost, organisation and portfolio strategies.

The source said the Finance Ministry will guarantee a B50 billion loan to rescue THAI, which is short of the B70 billion loan it had initially sought. Also, THAI will have to renegotiate its debts and cut costs.

The loan will be disbursed in tranches to ensure recovery stays on track.

THAI has suffered huge financial losses for years. According to Stock Exchange of Thailand (SET) data, the national carrier posted a net loss of B2.11 billion in 2017 - which grew to B11.6 billion in 2018 and B12 billion last year.

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Kurt | 11 May 2020 - 14:44:23

Thinking about it, I think this is not THAI 'Last Chance'.  THAI 'loan' will be evaporated by the end of 2020. THAI will be excused due to Covid19 virus troubles. So, by end of the year up to the next 'Last Chance'. Thailand has patent on 'last chances', 'last warnings'. Just words.

Kurt | 07 May 2020 - 12:43:59

Globally, airlines tuned down in service. SIA flys only very limited 10 planes on a 4-5 international routes, as all international airlines do. And all see now share prices down. That is due to Pandemic, not because of miss management by pensioned air force generals and influential Hi-So's,  who many years now keep THAI in impressive red figures.

Kurt | 07 May 2020 - 11:24:34

r u sure: You mix/compare the normal operation years with present Corona pandemic what has a huge impact on global air industry. For THAI, see beside the pandemic and judge the past 10 years. I myself wrote before about overstaffed, to many type of aircrafts, inefficient use of crews and aircrafts. ( operations)

r u sure | 06 May 2020 - 16:39:28

Wow ! Is there nothing Kurt isn't an expert on?
SIA share price currently down 50% FYI and also majority government owned!
It will need a lot more than cutting down on "perks" to save Thai! Over staffed ,overpaid, too many types of aircraft. Inefficient usage of crew and aircraft types, the list goes on!  Even the great SIA have cancelled 100's of flights and mothballed  planes...

CaptainJack69 | 06 May 2020 - 12:42:10

They're too expensive, simple as that. Passengers' number one concern is price and for every route there are cheaper carriers offer equivalent quality. Not long ago I saw them asking 15,000 baht for a 1 way flight from Phuket to Bangkok, in economy!

Kurt | 06 May 2020 - 10:58:01

'Last chance' plan? Ok. So, now we wait for a business plan of Thai. They have to come up fast with it, coz the loan/given money covers Thai only till the end of 2020. Could stretch that a bit by starting to dismiss 40% of the employees, and stop all that free flying for families and friends. Bring airline operations in line with as SIA operates. ( for example)

 

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