Thai Airways acting president Chansin Treenuchagron claims the airline is still on schedule with its debt rehabilitation plan. Thai Airways has until February 2nd to submit its plan to the Central Bankruptcy Court in Thailand after it was granted a one-month extension.
In an attempt to save Thailand’s national airline from going under, the country’s Central Bankruptcy Court approved its restructuring back in September. Having accumulated $11bn in debt, the carrier was set a deadline of January 2nd to submit its full rehabilitation plan. However, the courts gave Thai Airways an additional month to finalize its rescue plan, with a new deadline of February 2nd.
The extension suggests Thai Airways has been struggling to reach a satisfactory agreement with all parties involved. In a statement, acting president Chansin Treenuchagron offered reassurance that the airline is still on track with its plan.
The nature of Thai Airways’ debt is complex, with banks, aircraft lessors, lenders, and suppliers all looking for a satisfactory outcome. The airline is ‘moving closer and closer to an agreement’ with its creditors. Before it can submit its plan to the Central Bankruptcy Court, Thai Airways requires approval from its creditors.
While Thai Airways initially planned to implement the restructuring plan by the first quarter of 2021, it wasn’t able to finalize and submit the details in time. The airline is also working with consultants and advisors to help it deal with all the complexities of the restructuring process. Mr. Treenuchagron added,
Thai Airways has been in a difficult position for a few years now, with fierce competition from low-cost carriers contributing towards spiraling debt. The airline was in a precarious position before the COVID pandemic had begun, with the downturn in air travel only adding to its woes. By July 2020, Thai Airways had defaulted on over $3bn worth of debt and suspended most of its operations.
Domestic air travel has remained steady in Thailand for most of 2020, with the country faring better than most in its domestic market. However, a second COVID wave sweeping across Thailand has led to a 60% drop in air travel since the beginning of the year. Thai Airways has resorted to increasingly novel methods of raising capital during the pandemic. This includes selling surplus consumables like salt shakers, aircraft tires, and wine glasses, as well as auctioning off 32 widebody planes.