MIAMI – As part of its restructuring plan, Thai Airways (TG) will sell its 42 aircraft and cut its workforce by one-third from 21,300 to 14,500 by end of 2022.
Piyasvasti Amranand, head of TG’s restructuring plan, said that the planes that are being sold are old and not fuel-efficient. According to aerotime.aero, 16 jets on lease will also be returned.
After the sale and return of leased aircraft, TG’s feet size will consist of 58 aircraft across four types.
Cutting Losses Post COVID
The airline was in trouble long before the pandemic hit. It is currently undergoing a bankruptcy-protected structuring. On Monday, the Thai Government re-opened its borders to vaccinated tourists from 63 countries without the need to quarantine.
To help with cash flow, the airline will conclude a 25bn baht (US$749.18m) credit agreement with financial institutions by next year and is in talks with the government for an additional 25bn baht.
Amranand stated that the airline is making plans to increase flights with a particular focus on Europe over the next few months as travel begins to recover.
Due mostly to its cost-cutting measures, TG made a net profit of 11.1bn baht (US$332.6m) in the first half of 2021, compared to a loss of 28bn baht in the same period of 2020.
In April 2020, the Thai government intervened to give TG a 50bn baht credit guarantee, reaffirming the airline’s status as a state concern. In the absence of a “get well” strategy, the decision was made. The bailout funding was canceled a week later, and the government replaced it with a proposal for TG to file for debt restructuring with the Central Bankruptcy Court.
According to the Bangkok Post, TG owed 410bn baht to 13,000 creditors as of March 2021. The state-owned Krungthai and Government Savings Banks are its principal creditors. The government financing of 50 billion baht would have barely kept it afloat for five months. Later, an 80bn baht capital infusion would have been required.
The Central Bankruptcy Court granted an order to approve TG’s Business Rehabilitation Plan as well as the amended plan following the acceptance resolution of the creditors’ meeting on May 19, 2021.
Thai Airways is the flag carrier airline of Thailand. Formed in 1961, the airline has its corporate headquarters in Vibhavadi Rangsit Road, Chatuchak District, Bangkok, and primarily operates from Suvarnabhumi Airport (BKK). The airline is the second-largest shareholder of low-cost carrier Nok Air (DD) with a 15.94% stake as of 2020.
Featured image: Thai Airways Airbus 350-900 HS-THJ. Photo: Alberto Cucini/Airways