The never ending saga around Thai Airways that is currently seeking reorganization in Thailand’s bankruptcy courts goes into another round as calls mount to dissolve the airline and form a new company.
This new discussion has prompted an outcry from unions who argue that THAI is a strong national symbol and the investments so far have been too great to just scrap the carrier.
THAI has now grounded their mainline operations for over a year and is only operating their semi-commercial “special flights” which is a bare bones schedule serving mostly as repatriation flights.
Since last year Thai Airways has lost it’s status as a state enterprise after the government reduced it’s shares to less than 50% and the carrier has shed 2/3 of it’s employee numbers.
However the airline isn’t showing much progress with it’s debt load and the proceedings in Bangkok’s Central Bankruptcy court which caused new calls to think about dissolving the airline entirely.
There was an article in the Bangkok Post today where this has already caused excitement among unions.
The workers union of Thai Airways International Plc (THAI) has voiced its opposition to any plans to establish a new flag carrier to replace the ailing national airline, saying far too much has been invested in the airline, which has contributed significantly to the economy.
In a statement released on Tuesday, the union firmly rejected the idea, saying it would make much better sense to rehabilitate the ailing carrier, which already has a solid and internationally known brand.
Finance Minister Arkhom Termpittayapaisith said there haven’t been any discussions about turning the airline into a state-owned enterprise like it had been. It will be up to the airline’s creditors to decide, he said. …
With debts totalling over 300 billion baht, the airline is currently seeking to rehabilitate its finances through the Central Bankruptcy Court.
While THAI isn’t the only airline that has sought to reorganise its financial obligations through the courts since the Covid-19 pandemic brought international travel to a halt, it is among the few which is reeling from the aftermath of widespread graft by politicians in previous governments.
The union urged the government to maintain its support for THAI’s debt-restructuring efforts so that the airline can emerge stronger. …
The union added a new airline would not be competitive given the current sluggish aviation market. …
It’s obvious that unions are against it. THAI has cut down more than 60% of all staff and recently more than 4300 existing employees out of roughly 13,000 left over employees failed a merit test for new contracts.
As far as the 300 billion THB in debt is concerned so far Thai Airways management has decided not to ask the creditors and court for debt forgiveness, a decision that makes the entire process rather redundant as there is no way the airline can survive in the long term without the creditors taking a severe haircut on the outstanding debt.
Of course forcing this would ruffle a lot of feathers with influential companies and individuals in the Kingdom and is putting into question where the loyalty of the company directors really lies.
The calls for a new national airline has mostly been coming from political opposition parties and public commentary.
After one year of the fleet on the ground there should be a pathway to the future that doesn’t include several hundred billion baht of debt. So far this hasn’t been even remotely achieved which fuels the argument that a reorganization of THAI in it’s current form is futile.
Thai Airways is indeed one of the most famous brands of the country and has for decades been the face of the nation for many travelers. That doesn’t mean however that the company can continue to live above it’s means and burn money of the public purse because of the greed and incompetence of management.
Many THAI executives have been entangled in graft allegations and convictions over the years being a large piece in the puzzle of the airlines misfortunes. Should the bankruptcy court indeed reject the reorganization plan or someone with the power to push it through decide to pull the plug on Thai Airways the fallout would be substantial.
In any case now would be a better time to get it done rather than later when there is an upswing in international air travel and tourism activity again. Current signs in Thailand don’t speak for this happening anytime soon as a strong reemergence of the Coronavirus is gripping the country and the “Phuket Sandbox” re-opening that was planned for July already peril.