THAI to file for bankruptcy, second flag carrier to collapse
- A Monitor Desk Report 19 May, 2020 | 778 Views|-+
Dhaka: The government of Thailand is to push Thai Airways into bankruptcy protection marking it world's second flag carrier to collapse since the coronavirus pandemic.
The cabinet of Prime Minister Prayuth Chan-ocha will today be asked to consider a proposal from the transport ministry for a rehabilitation plan that would result in the restructuring of the lossmaking state-owned carrier after a bankruptcy filing in court, Thaworn Senniam, Deputy Minister of Transport said on May 18.
The move comes after years of widening losses at the airline, and a rift inside the government, where some ministers had favoured rescuing the airline with a bailout loan worth USD 1.7 billion.
“People don’t want to inject more money without getting a foolproof return in terms of reorganisation,” said a second government official.
Two government officials said they expected the cabinet to approve the proposal, but added that the decision on whether to proceed would be confirmed only today.
Airlines across the world are reeling from the grounding of flights due to COVID-19, and are between them seeking tens of billions of dollars worth of bailouts.
Avianca, Colombia’s privately owned national flag carrier, filed for Chapter 11 bankruptcy in the US this month, while Virgin Australia, the second-biggest airline in Australia, entered administration in April after it failed to secure a USD 904 million government rescue package.
Thai Airways was already in deep trouble before the pandemic because of its failure to keep up with competitors’ fleet and service offerings, its decision to operate flights on unprofitable routes and the appreciating baht.
The airline reported a net loss of THB 12 billion in 2019 while Sumeth Damrongchaitham, its former chief executive, quit his post in March.
Thailand banned most incoming commercial flights at the end of March, sending THAI's fleet and over 20,000 of its staff home on partial pay.