Bangkok (AP) — Thailand’s Cabinet has approved a reduction in the government’s stake in financially troubled Thai Airways International to under 50% as part of a reorganization plan to be submitted to bankruptcy court.
The airline will lose its status as a state enterprise with the reduction in the 51% share held by the Finance Ministry.
Thai Airways is carrying an estimated debt burden of almost 300 billion baht ($9.4 billion). It ran up losses of 12 billion baht ($374.3 million) in 2019, 11.6 billion baht in 2018 and 2.11 billion baht in 2017.
The Transport Ministry will submit a list of prospective business rehabilitation planners for Prime Minister Prayuth Chan-ocha to choose from, Saksayam announced at a press conference after the weekly Cabinet meeting. The planner will be responsible for drafting a plan to be submitted to the Central Bankruptcy Court within a year.
The plan will also be submitted to U.S. courts, Saksayam said, a standard practice for big multinational companies.
The airline initially sought a 54 billion baht ($1.7 billion) bailout loan from the government after virtually ceasing operations due to the coronavirus crisis.
It is not clear when its flights will resume. The government last week extended to the end of June a ban on arrivals on international passenger flights, ruling out their immediate resumption.
“This is the time for Thai Airways to be x-rayed to see what mistakes they have made and correct them,” Saksayam said. “The prime minister helped the firm once in 2015. And if Thai Airways had strictly followed the plan, we should not be here today.”
The airline went a partial restructuring in 2015, when Prayuth was serving a first term as prime minister in a military government established after a coup. The airline was already deeply in debt and needed to cut loss-making routes, reconfigure its fleet and get rid of staff through attrition.
It is almost certain to cut staff, fleet and flights under any new reorganization plan.
The airline was founded in 1960 as a joint venture between Thailand’s domestic carrier, Thai Airways Company, and SAS, Scandinavian Airlines System, which sold its stake in 1977. The airline’s shares were listed on the Stock Exchange of Thailand in 1991.