Thai Airways | Bankruptcy Proceedings

[Sundance2020]

Strapped for cash, Thai Airways puts 3 more aircraft up for sale

The beleaguered national carrier, Thai Airways International, is to sell 3 more aircraft in a bid to raise some much-needed funds. Also up for grabs is a flight simulator, as the airline continues with its rehabilitation plan and attempts to modernise its fleet. The Bangkok Post reports that the airline is selling 3 of its Airbus A330-300s, all of which are over 12 years old, and the corresponding flight simulator.

The Covid-19 crisis and decline in global travel means there is currently limited demand for the wide-bodied A330-300s, of which Thai Airways has 15 in its fleet. The airline has put 34 aircraft up for sale since November 2020. The Bangkok Post reports that they include 10 Boeing 747-400s, 6 Boeing 777-200s, and 6 Boeing 777-300s. It has also let go of its 6 Airbus A340-600ds, 3 A340-500s, 2 Boeing 737-400s, and an Airbus A300-600.

Last year, the airline had to appeal to the Central Bankruptcy Court, having been losing money for years thanks to mismanagement and corruption. The Covid-19 pandemic proved the final nail in the coffin, forcing the carrier to ground its entire fleet.

Meanwhile, Piyasvasti Amranand, one of the administrators of the Thai Airways rehabilitation plan, says the carrier could sell 10 Boeing 747s if it gets approval from the Transport Ministry. However, the ministry says that to date, it has not received any such request from the airline.

[Logan]

More cuts at Thai Airways as flagship carrier continues rehab process

The chairman of the Thai Airways rehabilitation plan says the airline is making good progress with cost-cutting exercises. Piyasvasti Amranand says Thailand’s national carrier has managed to recover 44.8 billion baht by cutting its workforce and ending aircraft lease agreements. “Thai Airways’ operational performance has progressed satisfactorily in many aspects, including cost reduction and organisational restructuring.”

According to a TTR Weekly report, the airline implemented 400 priority projects to reduce operational expenses, achieving 77% of its cost-cutting target. The workforce has been slashed from 29,500 employees in 2021, costing 2,600 Mllion THB a month, to 14,900 now, at a monthly cost of 600 million baht. Piyasvasti says the job cuts have saved the carrier 16 Billion THB in addition to a 12 Billion THB reduction in fuel costs, and savings from fleet restructuring. The return of leased aircraft, coupled with engine negotiations, has resulted in another 11.3 Billion THB reduction in costs.

Thai Airways has ended lease agreements on 16 aircraft, and is selling or disposing of 42 fuel-inefficient aircraft. The carrier is left with 38 operational aircraft, while its subsidiary, Thai Smile, continues to operate a further 20 A320 aircraft. The reduced workforce means the airline has been able to put some of its vacant office properties in Bangkok, Chiang Mai, and Chiang Rai up for sale or rent, and could possibly rent out some floors at its head office building in order to cut costs further. Meanwhile, much-talked about perks such as free business or first-class tickets for board members, retired employees and their families have been cancelled or reduced.

TTR Weekly reports that last month, Thai Airways generated the most operating revenue since April 2020, reflecting a light at the end of the tunnel for the aviation sector as a whole. Since April 2020, the carrier has earned around 10,000 Million THB from its cargo and mail service, while its Aviation Business Unit generated 4,800 Mllion THB from providing services to 80 airlines. Its operating loss during the first half of 2021 was also lower than 2020, at 3,973 Million THB with net profit 39,151 million baht higher than last year, at 11,121 million.

[Tripadvisor]

Thai Airways restructures plans to get back in black

Thai Airways announced it is renting three more planes and hiring 600 more staff this year as part of its restructuring plans. After cutting costs, selling stock, chasing debts, and distributing plane seats, Thai Airways’ turnover rate in the third quarter of this year is expected to increase. Not only that, the President of the Reorganisation Committee of the Thai Airways International Public Company, Piyasavat Amranand, says he expects the company to be back in black within the next two years.

Piyasavat added that Thai Smile Airways, a subsidiary of Thai Airways, has seen an increase in passengers. He said the number of passengers is at about 80% of the pre-Covid-19 days. The president said Thai Airways needed more personnel, especially ground staff, in response to the increasing number of passengers. So, he made known that they would outsource 600 staff to fill vacancies in the ground service area, cargo department, and kitchen. The number of company staff will be raised to 15,000 next year.

Piyasavat added that Thai Airways had 68 aircraft and would rent another three in preparation for China reopening. He revealed that China would accept flights from Thailand next month, but only 15 flights per week at the moment. The company is also expecting more travellers from India, and European countries as Thailand approaches its high season from October to December. Moreover, Thai Airways will resume direct flights from Bangkok to Milan, Italy, and Bangkok to Oslo, Norway, by the end of this year or the beginning of next year, and increase flights from Bangkok to Jeddah in Saudi Arabia from four to seven flights per week. Piyasavat believes Thai Airways will be back in black and on track by 2024 and end its reorganisation plan in 2025.

[Sundance2020]

Thai Airways has sold 11 of its old aircraft, 26 to go

Thai Airways has managed to sell the first 11 aircraft out of a total of 37 it has put up for sale as part of its bankruptcy recovery program. The airline’s acting president, Chansin Treenuchagron, ay Thailand’s transport minister has permitted Thai Airways to sell 1 older Boeing 737-400 plane and 10 Boeing 747-400 ‘Jumbo’ jets. Thai Airways had found buyers for the 11 furloughed aircraft but Thailand’s Civil Air Operating Licence required authorisation from the minister in charge.

Transport Minister Saksayam Chidchob has now permitted to dispose of the 11 aircraft. Meanwhile, the national airline has been trying to recover since its filing for bankruptcy in May 2020 by reducing expenses, reforming the organisation, reducing staff and senior management, and selling unnecessary secondary assets, including some of its older fleet. The airline also sold land, buildings, and stocks in Bangkok Aviation Fuel and Nok Air (which also filed for bankruptcy in July 2020). The former proud national carrier was carrying 400 billion baht debt when it filed for bankruptcy.

The airline’s acting president Chansin said that Thai Airways has already sold around 9 billion baht in assets as part of its recovery. The airline has also been adding new routes or re-establishing old flights as the global aviation industry slowly recovers from the Covid pandemic. The airline also made over a million baht in just a minute in March this year by selling their colourful economy class seats from a decommissioned Airbus A330-300. They also opened up a pop-up restaurant at their Bangkok offices serving Thai Airways in-flight meals (with seats from their planes of course).

The airline has put 37 aircraft up for sale since November 2020. They include 10 Boeing 747-400s, 6 Boeing 777-200s, and 6 Boeing 777-300s. It has also let go of its 6 Airbus A340-600s, 3 A340-500s, 2 Boeing 737-400s, 3 Airbus A330-300s, and an Airbus A300-600. A large majority of their existing fleet is still sitting about the apron of Suvarnabhumi Airport gathering dust waiting for the demand on their flights to resume.

[Xerxes]

Court clears THAI for takeoff, as it doubles Aussie flights

Thai Airways (THAI) received a much-needed boost today when the Central Bankruptcy Court approved the airline’s request to overhaul its recovery plan. The news comes on the back of a THAI announcement that passengers increased by 80% this month and plans to double flights to Melbourne, Australia, in December.Thailand’s national flag carrier was told by the court to carry on after most of its creditors backed the revised plan, according to the Nation.

It was reported that about 79% of the creditors, including the Finance Ministry, endorsed THAI’s revised recovery plan. THAI has struggled over the past few years like most businesses on the back of the Covid-19 pandemic. The airline filed for bankruptcy protection in late 2019 after reporting massive debts of 245 billion baht. The Cabinet in May 2020 gave the rehabilitation plan the go-ahead under the Bankruptcy Act, which was later approved by the Central Bankruptcy Court. But green shoots of recovery have sprouted over the past few months. In July, THAI announced it was renting three more planes and hiring 600 more staff as part of its restructuring plans. And, after cutting costs, selling stock, chasing debts, and distributing plane seats, turnover increased.

THAI made it known that it has seen a passenger increase of 80% for the first 10-days of this month, according to Thai Enquirer. The airline said that its average passenger traffic stood at 17,554 people per day from 2,092 people per day in January 2022. THAI added that travel demand continued to grow in the first 9-months of this year, due to the relaxation and removal of travel restrictions and restrictions in countries around the world. Meanwhile, THAI announced plans to double flights between Melbourne Tullamarine and Bangkok Suvarnabhumi from December 01.2022 according to simpleflying.com.

The flight schedule between Bangkok and Melbourne:

Bangkok to Melbourne
TG461: departs Bangkok at 8.20 am, and arrives in Melbourne at 9.20 pm.
TG465: departs Bangkok at 12.05 am, and arrives in Melbourne at 1.05 pm.
Melbourne to Bangkok
TG462: departs Melbourne at 12.30 am, and arrives in Bangkok at 5.40 am.
TG466: departs Melbourne at 3.25 pm and arrives in Bangkok at 8.35 pm.

[Steve]

Thai Airways refunds possible, reorganisation approved

Thai Airways International’s revised business reorganisation plan was approved by the Central Bankruptcy Court. The plan was submitted last month and the airline will now start on a course of financial restructuring. Does this mean everyone waiting for a refund from the Covid-19 pandemic and before Thailand’s flagship airline declared bankruptcy will finally get their money back? It is reported that part of the deal reached on Thursday with the bankruptcy court was to begin refunding customers who bought tickets before Thai Airways moved in May of this year to file bankruptcy. But don’t start your shopping spree yet, the refunds are expected to be finished by the end of January 2024. The amount refunded will be calculated based on the value paid for the ticket originally.

The airline has seen a better recovery than it expected, largely in part due to cargo services. Since Covid restrictions eased and borders reopen, passenger and cargo traffic has steadily increased, supporting improved financial and operational performance. Thai Airways now has a cash flow of around 20 billion baht. In January the airline was carrying just 2,092 passengers per day. But today they’re averaging 17,554.

The Ministry of Finance and other creditors for the airline have approved the restructuring plan that the bankruptcy court just gave the green light to. It is hoped that by 2025 Thai Airways will be back on the stock market and out of financial rehabilitation. They will hire a financial advisor to nail down a debt-to-equity conversion recapitalisation over the next two years of about 25 billion baht, about half of the previous goal.

Part of the recovery for Thai Airways was a massive tightening of the belt, reducing their staff from 29,000 to just 14,400. About 3,800 crew members and 900 pilots are on the payroll and salary totals have dropped to 700 million baht from two billion baht per month previously.

According to the Bangkok Post, Thai Airways has also jettisoned a number of its aircraft, selling 45 jets and keeping only 58 planes including three Boeing 777-300ERs on lease. Those were acquired in April in order to meet the demand of increased passenger traffic as the world comes out of the Covid pandemic.

Meanwhile, Thai Airways added three more of the Boeing aircraft to its fleet just this week. Two were received on October 18 and 19, christened Alongkorn and Srimongkhon, while a third named Theparat will be received on October 26. 2022 The new planes are decked out with state-of-the-art equipment and are eco-friendly and fuel efficient. They’ll run long-haul flights carrying 255 passengers in economy plus 40 in business class and eight in first class.

[Joker]

THAI needs to raise 10 Billion THB as part of its restructuring plan

Thailand’s State Enterprise Policy Office (SEPO) announced Thai Airways (THAI) needs to raise 10 billion baht to ensure the company’s shareholding does not dip below 40%. The Finance Ministry, THAI’s biggest shareholder with a 47% stake, revealed plans are already underway to raise the finances and preserve its shareholding in the company.

SEPO Director General Pantip Sripimol reported that the ministry is selling some of its shares in other state enterprises to raise the necessary funds. Pantip added that the Finance Ministry has not revealed which state industries will be sacrificed as part of the deal as the decision will be made by the ministry’s policymakers. The Finance Ministry made known recapitalisation money will not come out of the central budget coffers that the government allocates to the ministry.

THAI received a much-needed boost last week when the Central Bankruptcy Court approved the airline’s request to overhaul its recovery plan. Thailand’s national flag carrier was told by the court to carry on after most of its creditors backed the revised plan. About 79% of the creditors, including the Finance Ministry, endorsed THAI’s revised recovery plan. THAI has struggled over the past few years like most businesses on the back of the Covid-19 pandemic.

The airline filed for bankruptcy protection in late 2019 after reporting massive debts of 245 Billion THB. In May 2020, the Cabinet gave the rehabilitation plan the go-ahead under the Bankruptcy Act, which was later approved by the Central Bankruptcy Court. But green shoots of recovery have sprouted over the past few months.

THAI reported positive feedback since international travel resumed with the easing of the pandemic. They also made known they would pay refunds to customers whose flights were cancelled because of the pandemic. Pantip said the SEPO backs the sale of the Finance Ministry’s shares in non-listed businesses. Most of those shares were gained from acquiring foreclosed assets.