Thai Airways Files For Bankruptcy With Rehab Plan

Thai Airways has issued a statement contradicting reports about its bankruptcy that have been on headline worldwide.

Thai Airways Files For Bankruptcy With Rehab Plan
Thai Airways To Restructure In Bankruptcy Court With Rehab Plan Photo: Wikimedia

Regarding it's plan the airline said:

"Thai's reform plan has been approved by [Thai's] board of directors on 17 April 2020 and presented to the State Enterprise Policy Office for consideration on 29 April 2020."

"The plan will soon be presented to the cabinet for further action. The board  of directors had no resolution of filing for bankruptcy as appeared in the news."

From news earlier, the Thai Government has confirmed that it will go to bankruptcy court to submit a rehabilitation plan for its flag carrier, Thai Airways International.

A senior Thai official confirmed to Reuters that the airline will be filing for bankruptcy similar to Chapter 11 in the United States.

Thai Government spokeswoman, Narumon Pinyosinwat told Reuters:

"The State-Enterprise Planning Office agreed in principle for the rehabilitation of Thai Airways in court... the procedure will be submitted to cabinet tomorrow."

Thai ministers were discussing plans to save the flag carrier last week although the final decision is made by the cabinet. 

Thailand's Finance Minister, Uttama Savanayana, has already said that the government could be open to the option of THAI filing for bankruptcy. 

Thai Airways Files For Bankruptcy With Rehab Plan
This decision will replace the previous rescue plan Photo: Thai Airways

The confirmation of Thai bankruptcy will replace the previously planned business rescue plan. The previous plan involves the flag carrier seeking a 58.1 billion baht ($1.8 billion) loan guaranteed by the government.

However, after this declaration of bankruptcy, the Thai Government will now extend its previously guaranteed loan for the survival of the flag carrier.

Thai Airways Files For Bankruptcy With Rehab Plan
Thai Airways has over $2.87 billion in debt Photo: Getty

Thai Airways has reported consistent annual losses every year after 2012, except in 2016. The airline is suffering badly after the outbreak of corona virus, similar to majority of other airlines.

The flag carrier currently has over 92 billion baht ($2.87 billion) in debt, of which $677 million should be repaid this year.

Thai Airways Files For Bankruptcy With Rehab Plan
The airline have not announced a detailed rehabilitation plan Photo: Wikimedis

The rehabilitation plan for the airline have not been detailed as of now. However, a rehabilitation plan, in which the airline is a 51% shareholder, could be brought into effect by an order from the bankruptcy court.

Thailand has been in a State of Emergency since mid-April due to widespread of the corona virus halting most international flights.

Thai Airways Files For Bankruptcy With Rehab Plan
The new plan will involve cutting down the long-haul fleet Photo: Getty

The restructuring of the flag carrier under the government rehabilitation plan will involve cutting down the airlines long-haul fleet size. This will also mean job losses within the airline.

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