THAI seeks court approval for its revised rehabilitation plan
Thai Airways International submitted a petition to the Central Bankruptcy Court on July 1st, seeking to revise its rehabilitation plan, after the flag carrier improved its performance, with an expectation that it may exit the plan on or before the 2025 deadline.
Government Spokesman Thanakorn Wangboonkongchana said that, yesterday (Tuesday), the cabinet acknowledged THAI’s progress report, prepared by the committee tasked with following up on the airline’s performance under the court-approved rehabilitation program.
THAI filed for bankruptcy protection, after reporting total debts of 245 billion baht, at the end of 2019. The cabinet gave the greenlight to the rehabilitation under the Bankruptcy Act in May 2020. The Central Bankruptcy Court subsequentlyapproved the plan.
According to the progress report, THAI’s revenue from transportation operations has increased significantly, with the number of passengers using the airline averaging 12,654 a day, including over 12,000 passengers using the Thai Smile service during the month of June. This accounted for 33% of all passengers using all airlines operating in Thailand. Revenues from freight and parcel services for June amounted to 2.06 billion baht, an increase of 44% cover the same period in 2019.
THAI has managed to cut its personnel costs by downsizing by about 73%, from 29.4 billion to 7.9 billion baht per year. It has cut operating costs by about 8.5 billion baht, by reducing the aircraft types in its fleet from nine to four. It has sold offeleven Boeing 737-400s, an Airbus 340-500 and four Airbus 340-600s, with 18 more aircraft in the process of being sold.
The national flag carrier has also managed to reduce aircraft maintenance costs by 4.5 billion baht a year and earned about 9.5 billion baht from the sale of non-core businesses. It hasaccelerated efforts to recover payments from its debtors,which include government agencies such as the Royal Thai Air Force and the Royal Thai Police. The airline has also leased out space in its head office.
According to the progress report, THAI reported 14 billion baht in net cash reserves as of June 30th, which is the highest level for 24 months. The airline may, as a result, need new funding of about 12.5 billion baht, instead of 50 billion baht as permitted under the restructuring program.
Thanakorn said that he expects creditors to hold a meeting in September to consider the revised rehabilitation plan, after it was approved by the court.