THAI airways plans to cut staff by 50% or staff costs by 18 billion baht annually over next 2 years
After two postponements, Thai Airways International submitted its rehabilitation plan to the Legal Execution Department officials today (Tuesday), under which the debt-ridden national flag carrier plans to slash staff expenses from about 30 billion baht annually to about 12 billion baht, or to reduce its staff by half, to under 15,000, in two years.
Under the same rehabilitation plan, the airline will reduce the types of aircraft it operates from 12 to 5 and maintain a fleet of 86 aircraft, reduce unprofitable routes and cut maintenance expenses, said Mr. Chansin Treenuchagron, acting president of THAI, adding that, in the initial stage, when the COVID-19 pandemic situation has improved, the airline will focus its operations on profitable routes, with the hope that it will return to profit in the next four years.
For the time being, and in the foreseeable future, he said that no new aircraft will be purchased.
Regarding the airline’s accumulated debts of about 410 billion baht (~US$ 13.5bn) Mr. Chansin assured that there will be no haircuts on the debt repayments, the airline will pay only the principal, without interest, but with a grace period for the first three years.
On top of that, he said the airline plans to use about 50 billion baht, in the next two years, to increase its liquidity and sustain its operations.
He dismissed as untrue a report that the Thai Smile airline, an affiliate of THAI, will be dissolved, saying that it will continue to operate, but will have to make adjustments in order to sustain its operations.
Meanwhile, Mr. Chai Iamsiri, the acting vice president in charge of financial affairs and accounting, admitted that it is difficult to find investors interested in the airline under the present circumstances.
He added that there are still two months remaining to source fresh investments for the stricken airline.
Mrs. Pantip Sripimon, director of Office of State Enterprise Policy Committee, said that her office is yet to receive THAI’s rehabilitation plan adding, however, that once the plan is received and considered, her office may allow THAI to increase its capital by 35-50 billion baht.
Last year, THAI recorded 140 million baht in total losses, compared to 12 billion baht a year earlier, with 48 billion baht in revenues, compared to 135 billion baht in revenues in 2019.